Monetary Policy: The Negative Real Shock Dilemma

Imagine a negative real shock, like an oil crisis, just hit the economy. How should the Fed respond? Decreasing the money supply will help with inflation, but make growth worse. Increasing the money supply will improve growth, but inflation will climb higher. What’s the Fed to do?! ------------------------------------------------------------------------------------------------------------------------------ Subscribe for new videos every Tuesday! Macroeconomics Course: Ask a question about the video: Next video: Help translate this video:
2017-08-15 05:32:20
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