Difficulties the Federal Reserve might encounter in implementing policies that prevent inflation or deflation?

Answer 1

There are multiple ways the gov't can try to influence inflation/deflation. The FED controls the interest rate, the rate that the banks borrow money from it..then in turn lend to businesses and consumers.

Congress (and the Pres) can reduce/increase government spending (thus not only attempt to speed/slow the economy..but also to control monetary supply in the economy).

Been a while since I studied Macroeconomics, but would suggest reading Mankiw on it.. its beginner level. Good Luck

Answer 2

The Federal reserve tries to manipulate the economy by keeping track of certain indicators then raising and lowering the prime interest rate to keep it steady. They can only make calculated guess. There is no guarantee that they will do the right thing or that the economy will do what they're hoping for.

Answer 3

properly, for one element the Federal Reserve is approximately as Federal as FedEx. they have no longer something to do with the Federal gov't. they simply pose decrease than this way of call to fool human beings into trusting them. See the Obama Deception. On Youtube or Google video clips.

Answer 4

I think the Federal Reserve is the one that implements those kind of policies. Why would they encounter dificulties??