For this assignment you will write a 500- to 700-word memo evaluating two conflicting consultant reports. Your report should
- Describe the basic economic theory behind each consultant's report, using the ISLM and AS/AD models
- Explain, for each report, what actions the Fed is likely to take if the consultant's conclusions are true
- Describe how the bank would be affected by the potential Fed responses.
- Identify and explain potential issues in the conclusions from each report using your understanding of the economic theory.