USA Macro Economic

  • Do you feel that the interest rate that is “set” by the Federal Reserve is too low?
    • Provide an argument why interest rates cannot go lower – and need to be raised during the next Board of Governors meeting.
    • How would you advise the board, as Chairperson, to go about implementing a raise in the interest rate?
    • Explain and discuss this interest rate that you’re trying to raise.
  • What are the feedback effects of this interest rate increase on the US economy?
    • Look at this in terms of the Aggregat Expenditure Equation – C(Household Consumption), I(Investment), G(Government spending), NX(Net Exports).
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