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GDP in the US has been rising steadily since the Great Recession of 2008. To help the economy recover from that recession, the FED (Federal Reserve Bank) had lowered their interest rate to Zero percent to encourage consumption and investment spending. Now that the economy is robust and the unemployment rate is at a record low of 3.9 %, (below what is considered the natural rate), what policy measure would you recommend to the FED under these economic conditions - an expansionary policy, a contractionary policy, or a neutral policy? How will your policy recommendation impact interest rates, the unemployment rate, and the inflation rate?
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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