Conflicting Goals in Economic Growth 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 level would cause inflation to rise and thereby ruin the other objective-- stable prices, economic growth, which is our objectives in the long run. Overall financial stability will lead to a better balance between consumption and saving that will make resources available for investment purposes, reduce changes in the economy created by t....

Number Of Pages: 4

Number Of Words: 910

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