Economics
Employment can be influenced by monetary policy. However, many otherfactors tie in the big picture such as taxation, governmental spendingpolicies, natural resources, the financial markets and new technologies andeven war. All of these scenarios are weaved together to develop an overallemployment picture and must therefore be considered to work with anymonetary policies trying to address unemployment. Technically it is impossible to have every single individual inAmerica working. It is human nature for some people to be unemployed andthey will therefore find a way to get out of working for their daily bread,ah, money. However, this is not a monetary policy related response to thequestion. In regard to a monetary policy or any other governmentallysponsored policy creating an unemployment rate of zero percent, I do notfeel it is possible based on the before mentioned items and the socialimplications for a mandated full employment. No monetary or governmentallycreated policy could create an unemployment rate of zero percent. If I was in the position of chairperson of the Federal Reserve, Iwould ask the question if this impossible zero percent unemployment figure
Historically, inflation has tended to rise and fallbased on our nation's unemployment rate. The GDP is the total value of all products andservices bought and sold. If the rate of inflation is high for a year, what is the impact on theforecast for Real GDP growth in the succeeding year' It has become more difficult to predict how inflation will effectfuture years. These new ideals have fed awave of anti-inflationary economic policies that continue to diminish theeffects of inflation throughout the western hemisphere. For example, the positive economic growth and declininginflation in the United States over the past few years continues tosurprise analysts. This may or may not be a true indicator of anation's success. Analysts continue to forecast that this unlikely combination is unlikely toremain and that our nation could see increased inflation due to economicissues throughout the Asian nations which would eventually build domesticinflation here in the United States. But, with the Federal Reserve doing anoutstanding job containing the inflationary worries, we may not know whatthe results of high inflation will be until we can see through hind sightedreports. If I was in the position of chairperson of the Federal Reserve, myobjective to reduce the inflation rate to zero would be by controlling theinterest rates the Treasury pays to borrow its money. If the growth rate of Real GDP falls below 2%, there is an increase inthe defense spending. thing for the economy' As chairperson, my monetarypolicy would the goal of promoting efficient output and employment so aspromote stable prices. When the government increases governmentspending or they reduce taxes, they are raising our nation's budgetdeficit. Inflation is usually not good but in our scenario inflation isthe price for getting the economy out of the doldrums or a recession. The bottom line is that the world is at anew point of globalization and competitiveness.
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Acceptance Essays
