Business, 20.04.2020 20:20 michaelchavez6959127

The federal reserve plays a larger role than congress and the president in stabilizing the economy because changes in interest rates have their full effect on the economy in a short period of time, whereas changes in government spending and taxes have their full effect over a long period of time. the federal reserve can more quickly change monetary policy than the president and the congress can change fiscal policy. the federal reserve can immediately recognize when real gdp is below or above potential gdp. changes in interest rates have a considerably larger effect on the economy than changes in government purchases or taxes.

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