9223810 - Solutions - 1 Suppose the Fed were required to conduct monetary policy so as to hold the unemployment rate below 4 the goal specified in the

9223810 - Solutions - 1 Suppose the Fed were required to...

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1) Suppose the Fed were required to conduct monetary policy so as to hold theunemployment rate below 4%, the goal specified in the Humphrey–Hawkins Act. Whatimplications would this have for the economy? 2) The statutes of the recently established European Central Bank (ECB) state that itsprimary objective is to maintain price stability. How does this charter differ from thatof the Fed? What significance does it have for monetary policy?
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