Monetary Policy The Negative Real Shock Dilemma











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Imagine a negative real shock, like an oil crisis, just hit the economy. How should the Fed respond? • Decreasing the money supply will help with inflation, but make growth worse. Increasing the money supply will improve growth, but inflation will climb higher. What’s the Fed to do?! • ------------------------------------------------------------------------------------------------------------------------------ • Subscribe for new videos: http://bit.ly/1Rib5V8 • Macroeconomics Course: http://bit.ly/2hZVx2G • Next video: http://bit.ly/2uDomYF • Help translate this video: https://amara.org/en/teams/mruniversity/

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