On a seasonally adjusted basis, the CPI-U increased 0.3 percent in September after increasing 0.4 percent in August. The index for all items less food and energy rose 0.1 percent in September after increasing 0.2 percent in August. Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent. The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August. Real gross domestic product increased at an annual rate of 2.5 percent in the third quarter of 2011 according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent. The FOMC decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. The FOMC also decided to purchase up to $400 billion of long-term securities and sell short-term securities in order to "put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative." Look at the diagram of the business cycle. What part of the business cycle do you think the US Economy is currently in? Explain your answer with specific pieces of evidence from the graphs and data on the previous pages. Considering your answer to question number 1, what tool might the Federal Reserve use to help the economy? Explain how the tool you chose would impact the economy. Considering your answer to question number 1, How might Congress use the ability to tax and/or spend to respond? Economics 2a: Sample Questions Economics 2a: Students will develop an understanding of how economies function as a whole, including the causes and effects of inflation, unemployment, business cycles, and monetary and fiscal policies of the following economic measures is most likely to decline when the economy is healthy? The consumer price index. The unemployment rate. Industrial production. Lowering income tax rates will most likely increase consumer spending. government spending.
On a seasonally adjusted basis, the CPI-U increased 0.3 percent in September after increasing 0.4 percent in August. The index for all items less food and energy rose 0.1 percent in September after increasing 0.2 percent in August. Nonfarm payroll employment edged up by 103,000 in September, and the unemployment rate held at 9.1 percent. The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August. Real gross domestic product increased at an annual rate of 2.5 percent in the third quarter of 2011 according to the "advance" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.3 percent. The FOMC decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. The FOMC also decided to purchase up to $400 billion of long-term securities and sell short-term securities in order to "put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative." Look at the diagram of the business cycle. What part of the business cycle do you think the US Economy is currently in? Explain your answer with specific pieces of evidence from the graphs and data on the previous pages. Considering your answer to question number 1, what tool might the Federal Reserve use to help the economy? Explain how the tool you chose would impact the economy. Considering your answer to question number 1, How might Congress use the ability to tax and/or spend to respond? Economics 2a: Sample Questions Economics 2a: Students will develop an understanding of how economies function as a whole, including the causes and effects of inflation, unemployment, business cycles, and monetary and fiscal policies of the following economic measures is most likely to decline when the economy is healthy? The consumer price index. The unemployment rate. Industrial production. Lowering income tax rates will most likely increase consumer spending. government spending.