In what ways could the FED reduce unemployment?© BrainMass Inc. brainmass.com October 10, 2019, 3:58 am ad1c9bdddf
In what ways could the FED reduce unemployment? (I need to describe possible policies with their pros and cons)
The first ways in which the Federal Reserve can reduce unemployment is through reducing the federal funds rate. The pro of this method is that this method encourages businesses to borrow and increase employment. The con of this method is that this method leads to inflation.
The second way in which the Federal Reserve can reduce unemployment is through open market operations. Essentially, the Federal Reserve purchases government securities in the market and increases the liquidity with the banking system. The pro is that ...
Ways to reduce unemployment is discussed in great detail in this solution.