The federal reserve take to reduce unemployment

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A. What action can the federal reserve take to reduce unemployment?

B. What is the primary tool used by the federal reserve to accomplish the action you listed in part A? Explain, in detail how this tool works.

C. Assume the economy is currently operating at the natural rate of unemployment what affect will the action you listed in part A have in the short run on output, price level and interest rates? Explain in addition, use the AS/AD and Money Market diagrams to illustrate your answer - 2 GRAPHS

D. Assume the economy is currently operating at the natural rate of unemployment what affect will the action you listed in part A have in the long run on output, price level and interest rates? Explain in addition, use the AS/AD and Money Market diagrams to illustrate your answer - 2 GRAPHS

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Reference no: EM131387166

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