Explore BrainMass

Explore BrainMass

    Fed's policy strategy

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Read the attached and answer the following question.

    Critically analyze the reasons for shifting Fed's policy strategy from being patient to not being patient in raising the interest rate from its current 45 year low. What would be the possible effect of raising the interest rate by the Fed, as expected to happen later this year, on investment, consumption, employment, output, and inflation?

    © BrainMass Inc. brainmass.com March 4, 2021, 5:56 pm ad1c9bdddf
    https://brainmass.com/economics/economic-growth/fed-s-policy-strategy-19048

    Attachments

    Solution Preview

    Hello,

    The Fed must closely monitor present and near-term changes in the economy. If the Fed raises interest rates, it will be to prevent inflation from an economy that is growing too fast as determined by the 'experts'. If they guess wrong, a recovering economy may stumble. ...

    Solution Summary

    What would be the possible effect of raising the interest rate by the Fed, as expected to happen later this year, on investment, consumption, employment, output, and inflation?

    The Fed must closely monitor present and near-term ..........

    $2.19

    ADVERTISEMENT