STOCK MARKET
Question
1. Stock market conditions serve as a leading economic indicator. If the U.S. economy is in a recession, what are the implications of this indicator? Why might this indicator be inaccurate?
2. Assume that the Fed adopts an inflation targeting strategy. Describe how the Fed's monetary policy would be affected by an abrupt 15 percent rise in oil prices in response to an oil shortage. Do you think an inflation targeting strategy would be more or less effective in this situation than a strategy of balancing inflation concerns with unemployment concerns? Explain.
3 Go to the website www.federalreserve.gov/monetary policy/fomc.htm to review the activities of the FOMC. Succinctly summarize the minutes of the last FOMC meeting. What did the FOMC discuss at that meeting? Did the FOMC make any changes in the current monetary policy? What is the FOMC's current monetary policy?