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Federal Reserve Action Durng Economic Slowdown

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After the economic slowdown that started around the third quarter of 2000, the Fed lowered interest rates eleven times in the following year, 2001. What concerns would you have, if any, about the effort by the Fed to smooth out this economic recession?

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Solution Summary

This solution talks about the effects of the Economic Slowdown of 2000. It explores the Fed action of lowering interest rates eleven times and its consequences on the economy.

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CONCERNS ABOUT THE LOWERING OF INTEREST RATES:

The Fed should have been concerned about the increase in inflationary pressures. The lowering of interest rates leads to an increase in the ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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