Suppose you are a member of the FOMC and the U. S. economy is entering a recession. Write a directive (at least 4 typed pages, including your sources) to the committee about the conduct of monetary policy over the next two months. At the meeting, the committee will respond to changes in economic prospects as needed to support the attainment of its objectives. Your directive may address a target for the GDP growth rate, the federal funds rate, and the rate of inflation. Be sure to make specific proposals.

Following are the answer to this question:

Explanation:

The Monetary stimulus will increase economic time whenever an economy is progressing towards recession. The financial system will stabilize a stable market situation over the next two months to protect the market to move to a successful stage. In response to both the financial and economic crisis, the financial policies of the reserve bank. The fund's rate level falls towards its zero cut off point. The fomc will use instruments to promote economic growth or stable prices.

By reducing fund rates, the massive unemployment rate is reduced, Its inflation rate also will be reduced. Its decline in the rate of the fund helps make lending expenditures low. These individuals would also borrow huge amounts of money to satisfy their inflation market demands. The Taylor rule's approximation could provide an accurate fiscal policy standard.  In terms of short-lasting bond yields, long-term interest rate increases, and other asset values, one such expansionary fiscal policy forms private industry expectations often  Unless interest rates are reduced, asset rates go up. These long-term plans help to reduce the impact on strategies and objectives and the report will develop predictions to help stop predicted rising inflation and contribute to the future interest rates decrease.

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