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CHAPTER 13Stabilization PolicyCopyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved.QuestionsWhat principles should guide stabilization policy?What aspects of stabilization policy do economists argue about today?Is monetary policy or fiscal policy more effective as a stabilization policy?How does uncertainty affect the way stabilization policy should be made?Copyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved.QuestionsHow long are lags associated with stabilization policy?Is it better for stabilization policy to be conducted according to fixed rules or to be conducted by authorities with substantial discretion?Copyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved.Government PolicyThere are two kinds of government policyfiscal policyshifts the IS curvemonetary policyshifts the LM curveThe government uses policy to stabilize the macroeconomy by minimizing the impact of shocksCopyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved.Monetary Policy InstitutionsMonetary policy in the U.S. is made by the Federal Reserve which is the central bankthe principal policy-making body of the Federal Reserve system is the Federal Open Market Committee (FOMC)the FOMC lowers and raises interest rates and increases and decreases the money supplyCopyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved.Monetary Policy InstitutionsThe Federal Reserve has a central office and 12 regional officesthe central office is the Board of Governors in Washington, DCthe 12 regional offices are the 12 Federal reserve banks scattered around the U.S.the members of the Board of Governors and the Presidents of the regional Federal Reserve Banks make up the FOMCCopyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved.Figure 13.1 - Structure of the FederalReserve SystemCopyright ? 2002 by The McGraw-Hill Companies, Inc. All rights reserved.9、要学生做的事,教职员躬亲共做;要学生学的知识,教职员躬亲共学;要学生守的规则,教职员躬亲共守。10、阅读一切好书如同
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