Econ Notes - Feds should be officials in charge of econ,...

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Farmers raise prices to even our foreign demand for milk, because of the uneven exchange rate  - STAYING MIAMI GOING TO PSU Better Football Better Weather Creamery Better Fishing Better Dept Better Golf Better Weather Beach Less Crime Less Traffic Being w/kids ALWAYS CHOOSE ALT WITH LOWEST OPP. COST - Ex Ante – Before Hand Ex Post – After the fact Ex Ante decisions are rational - DAM MARGINAL COST  MARG BENEFIT DIFF Dam 1 $1 Million $2.25 Million $1.25 Million Dam 2 $1 Million $2.25 Million $1.25 Million Dam 3  $1 Millon $.5 Million $-.5 Million SHOULD NOT BUILD DAM BECAUSE  MC>MB - All you can eat Eat until your full, if you eat too much it becomes a negative cost - Fed Reserve - 1-23-08 2 Ideas w/ Fed Cut, 75 Basis Pts Interest Cuts will not make impact for 6 months MLK- Global market meltdown
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Unformatted text preview: Feds should be officials in charge of econ, other way around now-Why did greenspan lower interest rates in recession? Labor market needed to fix unemployment Jobloss economy-Idea economy has GDP Growth (2.95-3.5%) Full Unemployement (4.5-5.5%) Stable Prices (1-2% price increase)-Fed Lowers rates Bank sells bonds to Fed Fed gives cash + wants to gain interest Lower interest rates stimulate borrowing-Core Inflation (Core CPI) Food & Energy prices Outside forces = prices, instead of economic forces (ex hurricanes, drought)-CPI includes food + energy Core CPI- w/o food + energy Worst recession with oil shocks-Post recession recovery Unemployment rising/Interest rate drops-Misery Rates High unemployment high in inflation Early 80s Late 90s lowest...
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Econ Notes - Feds should be officials in charge of econ,...

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