Answer:
In this scenario, of low economic growh, high unemployment, and low inflation rate, the Fed needs to pursue what is known as a countercyclical policy, which is to say, the Fed needs to carry out policies that will result in the opposite economic conditions (high growth and more employment).
The most important policy tool the Fed has at its diposal is the interest rate. In this case, the Fed has to lower the interest rate. A low interest rate means that firms will be able to access cheaper loans in order to invest. The more they invest the more workers the will probably hire, and this would make the employment rate go up.
However, the Fed must take care of not lowering the interest rate just too much because this could lead to an excessive amount of money in the economy (money supply). If the money supply higher than the output of products and services, then, inflation could go up by quite a lot.
In conclusion, the Fed must lower the interest rate just enough to raise economic growth and employment, and keep inflation stable at the same time.
i believe its the 4th answer
Answer:
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Explanation:
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