Assignment:
Exercise 1 Questions
1. Fill in the blank: Lowering interest rates is an example of ______________ monetary policy.
2. The Federal Reserve is more likely to lower interest rates when inflation is;
a. below 2%
b. higher than 10%
c. above 3%
d. none of these
3. True or false: The Fed is more likely to raise interest rates when the GDP is falling.
Exercise 2 Questions
1. Complete this sentence: A Reuters survey of economists shows the consensus economic growth estimates for the third quarter of 2019 is;
2. The CME Group's FedWatch tool shows a probability the Fed will lower interest rates another 25 basis points at its next meeting.
a. 85%
b. 94%
c. 55%
d. none of these
3. True or false: The Federal Reserve's inflation stance is considered to be very hawkish at this time.
Exercise 3 Discussion Questions
1. Why is the Fed expected to lower interest rates at the next FOMC meeting?
2. What is the danger of lowering interest rates too fast?
3. What is the danger of lowering rates too slow?