Course work in macroeconomics

Low and stable inflation.

Because the inflation rate in the country is over the long-term outlook is primarily determined by monetary policy, the Federal Reserve can work directly to ensure that the U.S. economy benefits from low and stable inflation. This is helped by low and stable inflation the economy works efficiently. When inflation is low and stable, people can keep money without worrying about high inflation quickly destroys purchasing power. In addition, households and businesses can make longer financial decisions about borrowing and lending, savings and investments. Long term interest rates are more likely to be moderate when inflation is low and stable.

In contrast, deflation, which occurs when prices of goods and services fall on average, aggravates the household and business debt after adjusting for falling prices. Also, if inflation was kept close to zero, possibly with short-term interest rates as well may be too low and monetary policy may not be able to reduce producers sufficient interest rates to support the economy when there is a risk of decline. (Note that the term “politicians” is “money “Political Scientists” and “FOMC Politicians” are used interchangeably resulting in monetary policy aimed at keeping inflation in check 2% in the long run will help maintain an efficient and well-functioning economy, which will lead to higher and higher employment growth Living standards for U.S. citizens. In this way, the goal is achieved The maximum level of employment in the economy is closely related to the goal 2 percent inflation.