Ch 8 Nofes
achitveeconomc stobility FeDcon&uctsmoneferypoiic
Shmylnles bocrownYg & spending TAleestrok chonael: MsT+ Inkres+ Rakesv-y Boraw.ny &Sxn&rag T~Agg^egzK
One bank loans funds fo anoMer fara Shorffim O0A markf PUrclrases) to 1oU te&al fun&5 rate apprapnat monetay poirry to remey a recession 13SU0S hiddns knvow-mf guedx 0
-wanf do dvod hypesmfiafro
Z) who+ tot shouid (e uscel fo Ncrase tle mony ygy? - opcn Market pUrchasS ae AQicreO 5
Deowhatks o( expansionzry monefary poley: nwill (2Se M'Hahry 2. certom indoskocs wi/l be fovavod 3 The im poct will take 2n m&ekemmant amounfat tmy :7Nr, yoU hea fIj ait may nothc possibe fo lowesinterestrokes much - Liquidity TrapH if mkresf rales a aln&
I2) consumes &busMesses my be MscnsihvHd (oWe jnkresF rales > may not shmulote borrowMg/speacM8 -wkn t elonomy swarknc oufsidefe tonhec h1ddng KvoWf7cjU0) F 7increesc nkresf rokS -Rncovrage Sovmgs
Drauhrcks do Contraionay monefary folcyi Iy if will tause unemployment b%autpufhlfo1 n) (cchmmduskrswill be hamedmac than oters B) mpsct will tal sn m&kimioant dmounFattme Might notwak; consumus/busmesses may be Mscasitre fo ligle iAtuest rats Discehonacy monetan Policy- Qeliberde changes m te rery Supply to cure fecessions or iaflakion
ClSNotes
economic sfabilihy0 Gols ofteFe& 2% d)rice shbilihy ((ow inHahon : no &ef(ohoo) Z) Mximum emp(oymqf
MstkommalInkt RJes bocaoo/sanBmg >Aagrgak Deonob
Shmuloks tle macroecanomy
FeDerol Fonds Bok- Ke Ifc of mkresF chxge& when ae bonie loans tonds do anotes bank fac a shoct tme -ayyonstonary &ecreaies if recession-7idle cesources unempioyment is a pcoblem k pursue expansicnary monetary policy
inflahon-ong-vsedresaices&rismgpncos t pursue contrachonary monefarypo