The President’s Dilemma: Monetary Policy

Task: Identify how monetary policy can be used to help people represented by Silver Cougars?

To help people represented by the Silver Cougars, which are older Americans, monetary policy can be used. This monetary policy involves of interest rates and money supply. First, an idea may be to increase interest rates to slower the flow of money as it will decrease the demand of people to buy goods and services. The other solution is dealing with money supply. By allowing the government to sell bonds, the money supply will decrease, also making the money flow go slower. However, the problem with these solutions is that they will also increase unemployment, which we do not want to happen. So the problem would be a difficult one to solve with monetary policies, if we do not want to have an increase in unemployment.

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