Assignment: USA Macro Economic
• Do you feel that the interest rate that is "set" by the Federal Reserve is too low?
- Provide an argument why interest rates cannot go lower - and need to be raised during the next Board of Governors meeting.
- How would you advise the board, as Chairperson, to go about implementing a raise in the interest rate?
- Explain and discuss this interest rate that you're trying to raise.
• What are the feedback effects of this interest rate increase on the US economy?
- Look at this in terms of the Aggregat Expenditure Equation - C(Household Consumption), I(Investment), G(Government spending), NX(Net Exports).