EMPLOYMENT AND STABILITY

Topic

Employment and Stability

Instructions

Do you agree with Jerome Powell that further increases in the interest rate will best promote the attainment of the two objectives of the Federal Reserve Bank – maximum employment and price stability? Discuss the advantages and the disadvantages of this proposed policy using any of the real business cycle models we covered in Chapters 13 and 14.

Answer preview

The interest rate has always had an impact on the rise and fall of economic instability in the country which affects the employment rate also. Powell debate that the increased interest rates always bring economic fluctuations in the country. I agree with Powell. The global growth in the economy is strong to the extent that it is affecting the economic influence in many aspects. The tax cuts have shifted the price percentages to a sustainable basis. The inflation and change of tailwinds have generated a stable shift in the economic growth bringing the global economy to a recovery state.

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