Prompts
You are an FOMC member. In this "meeting", answer and justify your answer to the question "At what rate should the FOMC target the federal funds rate during its next meeting and why?" to your peers. To do so, please follow the instructions below:
Original Post Instructions
Your OP will be 2 parts:
Part 1: File attachment (PDF or PPT) of your 6 collected macroeconomic up-to-date FRED® visuals:
Figure 1: Real GDP or Real GDP per Capita
Figure 2: Real GDP Growth Rate
Figure 3: Unemployment Rate
Figure 4: Total Inflation and Core Inflation Rates
Figure 5 and Figure 6: 2 other indicators you think are most important/relevant to your policy proposal
Part 2: Your policy proposal and justification typed into the forum itself (do NOT include your written work as an attachment). Complete the following in your write-up:
Paragraph 1: State the Federal Reserve’s objectives. Include the current FOMC target federal funds rate (lower and upper limit) and the effective federal funds rate.
Paragraph 2: In a sentence, describe the current health of the economy. Then, summarize each indicator. You should explain what the indicator is, why it represents the "health of the economy," its current level and how it is has recently changed, referring to the FRED® data you collected.
Paragraph 3: What you think the FOMC target federal funds rate should be. (It’s OK that it’s only one sentence).
Paragraph 4: Justify your proposal by applying the AD-AS model to your policy (i.e., use the AD-AS model to explain how your target federal funds rate is expected to affect the economy). You can include a graph, and/or you can describe in words. If you include a graph you must also provide an interpretation of the graph.
Remember, citizens are counting on you to make an informed and responsible decision; and to communicate that decision in an understandable way!