EBK FOUNDATIONS OF ECONOMICS
EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
Question
Book Icon
Chapter 33, Problem 11IAPA
To determine

To explain:

The reasons for Fed to try not to raise the interest rates even though there is strong growth in jobs.

Blurred answer
Students have asked these similar questions
The Federal Reserve helps determine interest rates for the entire economy.  Answer the following questions below. How does the Fed stimulate the economy? How does the Fed affect interest rates? Does the Fed have complete control over U.S. interest rates? That is, can it set rates at any level it chooses? Why or why not? Do you think that the Fed should control interest rates or let the free market set the rates? What are the pros and cons of having the Fed or free-market determine interest rates?
Changing course, Australia raises interest rate The Reserve Bank of Australia (the central bank) raised its overnight rate (equivalent to the U.S. federal funds rate) by a quarter of a percentage point, to 3.25 percent a year, amid concerns about rising inflation. The interest rate rise came earlier than many economists had expected. Source: New York Times, October 6, 2009 If actual inflation had risen prior to the Reserve Bank raising the overnight rate, explain how the short-run tradeoff would change. The figure shows Australia's short-run Phillips curve and the long-run Phillips curve. If the natural unemployment rate remains at 5 percent and the expected inflation rate does not change, show the effect of the rise in the actual inflation rate in the graph. Draw either a new SRPC curve (SRPC₁) or an arrow along the SRPC curve showing the direction of change. 6- 5- 4- 3- 2- 1- Inflation rate (percent per year) LRPC SRPC 9 Unemployment rate (percent of labor force) >>> Draw only the…
Assume Canadian consumers expect future income to rise. Starting from the natural rate of output, explain with a graph how this expectation will affect the interest rate, inflation rate and real GDP in the short-run. Also show and explain how the bank of Canada can help take the inflation rate back to its original target?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning