In Terms of Desirable Features of a Monetary Policy Instrument

question 9

Essay

 In terms of desirable features of a monetary policy instrument, explain why the size of the staff at the Fed is not a good policy instrument. Be sure to address which feature(s) it fits and which one(s) it doesn't. 

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Definitions:

Socially Optimal

is a condition or outcome in which the allocation of resources maximizes the overall benefit to society.

Nonexcludable

A characteristic of a good whereby it is difficult or impossible to prevent people who have not paid for it from consuming or using it.

Rival

An entity competing against another in the same market or field.

Rival

A term used in economics to describe a good or service that cannot be consumed by more than one person at the same time, meaning consumption by one person diminishes the ability of another to consume it.