Overview
You have been
hired as an economic advisor to Peter Politico, who is running for US
Congress Unfortunately, Mr Politico is not very well informed about economic
issues You have been asked to write a briefing to prepare him for a debate
about
the role of the Federal Reserve (âthe Fedâ) in controlling unemployment
and inflation
Directions
To prepare to
write your briefing, explore the Project resources to make sure you understand
all the concepts that will come up in the debate The Project resources explaining
these concepts are listed in the order that you should review them Also, read
the two articles about the Federal Reserve
Write a briefing
that explains the important background concepts to Mr Politico The report
should be written so that someone without much knowledge of economics can
understand Your briefing does not need to follow a specific format, but it
should include the following information and follow this basic structure:
Begin by
explaining the background concepts of:
real GDP
inflation
unemployment
Explain the
concepts of aggregate supply and aggregate demand, including recessionary and
inflationary gaps
Explain what the
Fed does Use the above background concepts in your explanation, and answer the
following questions:
What is the Fedâs
âdual mandateâ?
What tools does
the Fed use to achieve its goals?
What happens when
the Fed pursues an expansionary or contractionary policy?
To provide Mr
Politico with two specific examples of how the Fed works, summarize the two
news articles For each article, explain the main ideas presented, the evidence
given to support these ideas, and the conclusions
Throughout the
briefing, you will need to translate any economics jargon into simple, clear
language for Mr Politico Look up any concepts that you donât understand to
help your analysis and be sure to use your own words as you write your
briefing