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Economic model to evaluate alternative monetary policies

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Reference no: EM131415553

1. Discuss whether or not the Fed should use its policy tools to smooth out the business cycle (reducing output during economic expansion and increasing output during recessions). Explain your rationale.

2. Discuss ways the Fed's objective function can be used with an economic model to evaluate alternative monetary policies. Provide specific examples to support your response.

Reference no: EM131415553

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