1. Inflation/UnemploymentWhat is inflation? Is it a good thing, or a bad thing?The Phillips Curve. What is it? Is it relevant?What is unemployment?Should the Fed set an inflation target? After all, most of the major centralbanks have one.If you could reduce unemployment by 1% by increasing inflation by 1%, wouldyou do it?*Would it be good or bad to reduce inflation to 0%, and why?*Would it be good or bad to reduce unemployment to 0%, and why?What would be the effect of deflation on the economy? Is it better thaninflation?2. The FedWhat is the Feds "dual mandate"?What does the "Fed Funds rate" mean?Raising rates hurts investment and productivity. Should the Fed then neverraise rates? Conversely, how can monetary policy stimulate investment?Does the Feds monetary policy actions affect long-term interest rates? Whyor why not?*Explain how the Federal Reserve and the government are connected-- is theFederal Reserve dependent or independent of the government, or both?3.) Current CrisisWhat is a "subprime mortgage"?Why did Bear Stearns, Lehman brothers, and other investment banks have somany problems?What catalyzed the current crisis and whats the major problem right now?.--Answer1:oo my ******* god...its enormously very big questions and it consist so many sub questions. Please remember nobody has got enough time to answer such big Q. Please try 1 single Q at a time.Ans. Whatever you asked it can be argued. Some preferes inflation some are not. Inflation increases unemployment as it increases production cost.Philip curve is absolutly relevant here.