feb14 - Fed 1 Anna Veldman Is the Fed doing the right...

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Fed 1 Anna Veldman Is the Fed doing the right thing? Econ 210-05 February 14, 2008
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Fed 2 The Fed has at this point lowered the interest rate to 4.25 percent, which is a whole percentage point lower than before. The fears are currently high that our economy is either already in a recession, or is going into one. The Fed hopes to offset the magnitude of this recession by continually dropping the interest rates to increase spending and give the economy a quick boost. Not all economists believe that this is the best solution. Some fear that this decreases in the interest rates are only going to worsen the state of our economy in the near future by setting it up for high rates of inflation. Some believe that when the Fed lowered rates in 2000, it put a lot of money into the system with its extremely low rates, and in fact caused the small recession we had in 2001. The thought is that the current low rates will lead to a bigger recession in the near future when the inflation rates begin to increase. One positive point that is being made is that exports have held strong this year because of
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This essay was uploaded on 04/07/2008 for the course ECO 210 taught by Professor Sun during the Winter '08 term at Grand Valley State University.

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feb14 - Fed 1 Anna Veldman Is the Fed doing the right...

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