Economics Honors

Web Review: Monetary Policy in Action-Case Study

(sorry there’s a lot of reading).

Steps: 1. Goto http://www.econedlink.org/lessons/index.cfm?lesson=EM761

            2. Task: Identify the current FOMC goals and policy actions.

Determine the intended impact of the policy actions on price stability, economic growth and employment.

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Review the makeup of the Federal Open Market Committee, its responsibilities and policy options.

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Determine how monetary policy actions impact the ability of banks to make loans.

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3. Point of View: Working with a partner, address the following question…

If you are a member of the FOMC, what will you look for in the coming months to determine what action, if any, to take at the May FOMC meeting (address the following)?

1.      GDP growth rate? ___________________________________________

2.      Inflation ___________________________________________________

3.      Employment? _______________________________________________

4.      Stability of the credit markets? _________________________________