Monetary Policy Choices

Monetary Policy Choices

​How can we use monetary policy to address macroeconomic issues?

Instructions

• We will present scenarios

• You will first decide if the scenario relates to the goal of full employment, price stability, or economic growth.

• Then you will decide whether the scenario calls for increasing monetary growth, decreasing monetary growth, or maintaining the status quo.

• Finally you will then identify a specific use of a monetary policy tool to achieve your policy goal.

Scenario 1

This is a graph of the unemployment rate in Canada from April of 2020 through April of 2021. Take note of both the trend and the current unemployment rate.

Multiple Choice

Which economic goal does this data relate to?

• Full employment

• Price stability

• Economic growth

Poll

Which monetary policy goal do you think is MOST warranted in this scenario?

• Increase monetary growth

• Decrease monetary growth

• Maintain the status quo

Open Ended

Why did you choose the policy goal you chose?

Multiple Choice

For this question, imagine everyone agrees we need to increase monetary growth, which option below would BEST achieve that goal?

• Selling bonds in open market operations

• Lowering the discount rate

• Increasing the reserve requirement

• Increasing the discount rate

Scenario 2

This is a graph of the GDP Annual Growth Rate of Germany From January 2018 to January 2021. Make note of the current growth rate and the trend.

Multiple Choice

Which economic goal does this data relate to?

• Full employment

• Price stability

• Economic growth

Poll

Which monetary policy goal do you think is MOST warranted in this scenario?

• Increase monetary growth

• Decrease monetary growth

• Maintain the status quo

Open Ended

Why did you choose the policy goal you chose?

Multiple Choice

For this question, imagine everyone agrees we need to increase monetary growth, which option below would BEST achieve that goal?

• Buying bonds in open market operations

• Selling bonds in open market operations

• Increasing the reserve requirement

• Increasing the discount rate

Scenario 3

This is a graph of the inflation rate in Turkey from April 2020 through April 2021. Make note of the current growth rate and the trend.

Multiple Choice

Which economic goal does this data relate to?

• Full employment

• Price stability

• Economic growth

Poll

Which monetary policy goal do you think is MOST warranted in this scenario?

• Increase monetary growth

• Decrease monetary growth

• Maintain the status quo

Open Ended

Why did you choose the policy goal you chose?

Multiple Choice

For this question, imagine everyone agrees we need to decrease monetary growth, which option below would BEST achieve that goal?

• Decreasing the discount rate

• Buying bonds in open market operations

• Decreasing the reserve requirement

• Increasing the discount rate