Suppose workers do not believe the Fed will implement its announced monetary policy plans and the Fed wants to achieve low unemployment.In this situation the Fed would be best off:
A)implementing a policy of high money growth.
B)announcing and implementing a policy of low money growth.
C)announcing a policy of high money growth and implementing a policy of low money growth.
D)following a policy that forces the actual inflation rate below the expected inflation rate.
E)promoting a low rate of inflation and adjusting actual policy plans to economic conditions.

Question

Quizplus · Accepted Answer

If workers do not believe the Fed will implement its plans, the Fed might achieve low unemployment by implementing a policy of high money growth, which can stimulate economic activity and reduce unemployment in the short term.

Suppose Workers Do Not Believe the Fed Will Implement Its