The text identified three goals of macroeconomic policy

1 (a) The text identified three goals of macroeconomic policy: (i) Minimize unemployment, (ii) Minimize inflation and (iii) Maximize economic growth. Obviously, these goals have elements that conflict with one another. Which do you think we are doing the best job of accomplishing in the U.S. currently, and which do you think should receive greater priority? Explain, and cite relevant statistics on the economy’s performance where possible. (b) In the early stage of her administration, Fed Chair Janet Yellen focused on maintaining a monetary policy of low interest rates to continue the Fed’s efforts to stimulate the economy. However, the article assigned indicates she faces some longer-term challenges. Identify one of these challenges, and describe what the article said about the interaction between Fed policy and this issue. What do you think she should do with regard to the issue you identified? (c) Why would nations favor fixed vs. floating exchange rates for their currencies? Why do some developing nations have a “fear of the float?

 

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