You have been hired as a Marco Economist by the President of the United States to help evaluate the recent announcement by Federal Reserve chairman Ben Bernanke that the FED will be increasing interest rates again. Ben Bernanke has justified the move on the grounds that the economy continues to be strong. Answer the following questions. Provide a graphical explanation for your answers whenever possible. 1. What is the fed trying to do? A. slow down the economy B. stimulate the economy C. remains unchanged 2. How is the fed doing it? A. buying bonds B. selling bonds C. remains unchanged 3. What happens to bond prices? A. increase B. decrease C. remains unchanged 4. What happens to the interest rate? A. increase B. decrease
You have been hired as a Marco Economist by the President of the United States to help evaluate the recent
announcement by Federal Reserve chairman Ben Bernanke that the FED will be increasing interest rates again.
Ben Bernanke has justified the move on the grounds that the economy continues to be strong. Answer the
following questions. Provide a graphical explanation for your answers whenever possible.
1. What is the fed trying to do?
A. slow down the economy
B. stimulate the economy
C. remains unchanged
2. How is the fed doing it?
A. buying bonds
B. selling bonds
C. remains unchanged
3. What happens to
A. increase
B. decrease
C. remains unchanged
4. What happens to the interest rate?
A. increase
B. decrease
C. remains unchanged
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