(Answered) You are the chairperson of the board of governors of the

Economics

You are the chairperson of the Board of Governors of the Federal Reserve. You believe in a Keynesian model of the economy, and your goal is to keep the economy at the full-employment level of output. How would you respond (tightening or easing policy) in each of the following cases?

(a) Government purchases increase

(b) Corporate tax rates increase

(d) There's a beneficial oil price shock (and the LM curve shifts more to the right than the FE line)

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Macroeconomics, Economics

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