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Full employment natural rate - PowerPoint PPT Presentation

Chapter 7

Chapter 7. Short Run Aggregate Demand and Aggregate Supply. Aggregate Demand. Effects Real Balance Effect - Price falls, increases purchasing power, we buy more Interest rate Effect - As price falls, interest rates fall, we borrow and spend more

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FOMC Statement: Statutory Dual Mandate: Maximum Employment (5.5% U.R.) (March projection)

FOMC Statement: Statutory Dual Mandate: Maximum Employment (5.5% U.R.) (March projection) 2014 = 6.2% 2015 = 5.8% 2. Price Stability (2.0% PCE Inflation) (March projection) 2014 = 1.6% 2015 = 1.8%. Fed Actions to lower rates and stimulate economy:

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Full employment natural rate - PowerPoint PPT Presentation

Chapter 7

FOMC Statement: Statutory Dual Mandate: Maximum Employment (5.5% U.R.) (March projection)