Economy is experiencing a sharp rise in the inflation rate

Assignment Help Business Economics

Reference no: EM131094719

Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economy is experiencing a sharp rise in the inflation rate. What change in the federal funds rate would you recommend? How would your recommended change get accomplished? What impact would the actions have on the lending ability of the banking system, the real interest rate, investment spending, aggregate demand, and inflation?

Reference no: EM131094719

Questions Cloud

Equal pay for work of equal value : “Equal pay for work of equal value” is a commonly held goal, but “equal value” is hard to define. What would be the consequences of legislation that enforces equal pay for what turns out to be work of unequal value?

Pros and cons associated with a cap-and-trade program : Identify some pros and cons associated with a cap-and-trade (CAP) program. Does its implementation increase costs? Is it appropriate to describe CAP programs as merely a way for "big business" to buy their way out of meeting environmental compliance?

Law of diminishing marginal utility : An important law in economics is the “Law of Diminishing Marginal Utility”. Discuss what this law is and provide an example of diminishing marginal utility you’ve encountered recently.

Explain why the mixed strategy is logical nash equilibrium : Explain why the mixed strategy is a logical Nash equilibrium, even though intuitively it seems like the worst thing that two friends could do. Explain what a best-response function is.

Economy is experiencing a sharp rise in the inflation rate : Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economy is experiencing a sharp rise in the inflation rate. What change in the federal funds rate would you recommend? How would your recommended change get ac..

Should the company charge to maximize profits : A company's marketing department has determined that if their product is sold at the price of p dollars per unit, they can sell q=1800−200p units. Each unit costs 7 dollars to make. What price, p, should the company charge to maximize their revenues?..

Increase in riskiness of bonds relative to holding money : Show the IS, LM or FE curve shifts in response to the following events. Note we are not analyzing general equilibrium here, just the shifts of the individual curves. Increase in the riskiness of bonds relative to holding money

Economic reasons that led to this shutdown : Between October 1st and October 16th, 2013; the United States experienced partial Government Shutdown. In your view, what were the economic reasons that led to this shutdown? Is it likely for US to experience another shutdown in future?

Increase in the demand for his products since the close : A factory that employs more than 70% of the workforce in the community of Green Island has closed, because of foreign imports. john who operates a convenient store within the community noticed a sudden increase in the demand for his products since th..

User Account

All Pages