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Webquest

 

Introduction:

 

You are a member of the Federal Reserve Board.  The economy is in your hands.

 

Task:

 

You have received the following data.

 

 

Year Ago

Month Ago

Now

Real GDP (billions $)

3600

3540

3540

Consumer Price Index

210

215

216

Unemployment Rate

7%

10%

11%

Gross Private Investment (billions $)

602

570

570

 

What are you going to do?

 

Process/Guidance:

 

Upon reviewing the data, address the following questions and issues. Be sure to use the resource links to help you as needed.

 

1.     What problem is the nation facing?

2.     Do you want to increase or decrease the money supply?  (Give support)

3.     Describe the monetary policy you would recommend.

a.      What are your options?

b.     What exactly would you do?

c.     Be sure to discuss the two tools the Fed could use to implement your policy.

4.     Describe the effects of your monetary policy on:

a.      interest rates

b.     investment

c.     output

d.     the price level

e.      employment

5.     Illustrate the effects of your monetary policy using:

a.      an aggregate demand/aggregate supply graph

b.     a Keynesian aggregate expenditure graph

 

Resources:

 

1.     The Federal Reserve Hyperstudio Presentation

2.     Your notes

3.     Your textbook

4.     Microsoft Word

5.     United States Monetary Policy

6.     Center for Full Employment and Price Stability

7.     Monetary Policy Rules in Open Economies

8.     Monetary Policy: Limitations, Advantages

 

Evaluation/Conclusion:

 

Compile all of the relevant data that supports your position and place it into a Microsoft Word document.  Be sure to include answers to the process questions and graphs that support your policy decision.