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Article: U.S. monetary policy: an introduction: part 2: what are the goals of U.S. monetary policy?
- Article from:
- FRBSF Economic Letter
- Article date:
- January 23, 2004
CopyrightCOPYRIGHT 2004 Federal Reserve Bank of San Francisco. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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This is the second of four consecutive issues devoted to our updated and expanded Q&A on monetary policy: (1) "How is the Federal Reserve structured?" and "What are the tools of U.S. monetary policy?" (2) "What are the goals of U.S. monetary policy?" (3) "How does monetary policy affect the U.S. economy?" and (4) "How does the Fed decide the appropriate setting for the policy instrument?" The revised text will appear in a pamphlet soon.
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Monetary policy has two basic goals: to promote "maximum" sustainable output and employment and to promote "stable" prices. These goals are prescribed in a 1977 amendment to the Federal Reserve Act.
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