Mal Practice

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Issue:

Business

 

Written by:

Teddy P

 

Date added:

February 6, 2012

 

Level:

 

Grade:

B

 

No of pages / words:

3 / 761

 

Was viewed:

2063 times

 

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Essay content:

Doing so could raise inflationary expectations and store up problems for the future. Abruptly increasing the money supply just to stimulate a temporary economic boom is typically not advised, due to the fact that eliminating the increased inflationary expectations will be nearly impossible without producing a recession...
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This goes against the goals of the fed to foster “price stability” and “maximum employment” (Blinder, 1997). I say typically a bad idea because there are periods when the economy is hit by some unexpected external shock (subprime mortgage crisis), and it may be beneficial to offset the macroeconomic effects of the shock with (expansionary) monetary policy...
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