Macroeconomics assignment! What should the FOMC do?

timer Asked: Nov 29th, 2015

Question description

(  There is general consensus among economists that there has been some expansion in the business cycle throughout 2014 and 2015. Some sectors of the economy are doing well but other sectors are not. The stock market and housing in some regions are recovering from the Great Recession nicely, but the unemployment rate, although falling slowly, is still relatively high and real wages are not increasing as rapidly as desired. The data is giving conflicting signals, as usual. If we are headed into a sustained economic expansion, low interest rates could be inflationary – and once that gets started, it’s hard to put that genie back in the bottle. Does the Fed want to continue with their stimulatory ("accomodative" in Fed-speak) monetary policy?

Suppose you were a voting member of the Federal Open Market Committee. Would you vote to implement monetary policies that would speed the economy up (to fight unemployment), or slow it down (to fend off potential inflation) -- and why?

In your submission, you'll need to address the following question. What should the Fed decide to do at this meeting?  I’m giving you a lot of latitude in this last Discussion Topic to tell me about the current state of the economy, the proper role of monetary policy (i.e. raise or lower rates), and how effective that would be compared to fiscal policy

Tutor Answer

(Top Tutor) Studypool Tutor
School: Purdue University
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors