Business cycle peaks ended in double-digit inflation

Assignment Help Microeconomics
Reference no: EM131737721

Question: During 2002, the Federal funds rate remained more than 1% below the rate of inflation. When that happened in 1972 and 1975, the next two business cycle peaks ended in double-digit inflation, although admittedly higher oil prices were also responsible. Do you think that the Fed decision to hold the funds rate below equilibrium will cause higher inflation at the peak of the next business cycle? What factors would influence your answer?

Reference no: EM131737721

Questions Cloud

Discuss cause of cyclical downturns in the future : If other sectors of the economy then weaken, that could exacerbate the recession, as occurred in 2001. To what extent do you think a stronger dollar is likely.
Describe the benefits for an organizational vision statement : Provide the name and description of the organization. Describe the benefits and purpose for an organizational vision statement.
What is the probability of pulling out : Taking a set of chess pieces (2 Kings, 2 Queens, 4 Bishops, 4 Knights, 4 Rooks and 16 Pawns) and place them in a bag.
Discuss red wheelbarrow : Explain your reaction to the imagery in Williams' poem, "Red Wheelbarrow." Questions to consider in your response
Business cycle peaks ended in double-digit inflation : During 2002, the Federal funds rate remained more than 1% below the rate of inflation. When that happened in 1972 and 1975, the next two business cycle peaks.
What is the price of a childs ticket : What is the price of a childs ticket? What is the price of an adult ticket? Write two algebraic equations that model this circus ticket scenario.
Determining the phosphorous measurements : Independent random samples from two regions in Tara gave the following phosphorous measurements (ppm).
Discuss mexican is not a noun : Explain your reaction to how Alarcón chose to structure his poem, "Mexican is Not a Noun." Pay close attention to Alarcón's word choice
Create a brief overview of the company requirements : Create a brief overview of the company requirements for a total rewards system. Indicate your strategy for devising a competitive pay structure.

Reviews

Write a Review

Microeconomics Questions & Answers

  Have these countries converged economically

The accompanying table shows data from the Penn World Table, Version 8.0, for real GDP per capita (2005 U.S. dollars) in France, Japan, the United Kingdom.

  Basic microeconomics concepts

In the competitive industry, reduction in property tax rate on fixed capital (plant) would reduce the fixed cost of all firms. This would have the following short-run effects on P, Q, and q respectively.

  What can government do to encourage more savings

Higher levels of savings and investment lead to greater rates of economic growth. What can government do to encourage more savings and investment?

  Why is culture change significant in long-term care choose

why is culture change important in long-term care? select one type of long-term care and present 3 barriers to

  Dscribe in your own words referring to notions of the

give the definitions for marginal rate of substitution mrs and the price ratio. then explain them in your own words

  What interest rate would this be a fair deal

Curly's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $33,000 per year forever.

  If it decreases the price will revenue increase

The Teenager Company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4,000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. If it decreases the price ..

  What entry mode they use to gain access to foreign markets

Select any company of your choice and provide a short paper which details their strategy and what entry mode they use to gain access to foreign markets.

  What will equilibrium income per person

The Solow equilibrium income equation 4.5 in the text says that y = Y/L = (s/n) a/1-a, that is, that income per person, y, which is simply total GDP (Y).

  So charges same price in each how many stones will it sell

gliberaces fashion accessories of las vegas produces gem-stone encrusted formal wear for sale in los angeles and san

  Distinguish between the discrete and integral views

What evidence supports the statement that SFAS No. 131 is Improvement over SFAS No. 14.

  What happens to the domestic real interest rate

Suppose that domestic inflation remains the same. What happens to the domestic real interest rate? What is likely to happen to the growth rate?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd