Conflicts in Monetary Policy

Goals of monetary policy are to 'promote maximum employment, inflation (stabilizing prices), and economic growth.' If economists believe it's possible to achieve all the goals at once, the goals are inconsistent. There are limitations to monetary policy. The term 'maximum employment' means that we should try to hold the unemployment rate as low as possible without pushing it below what economists call the natural rate or the full- employment rate. Pushing unemployment below that …

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