Following recent Federal Open Market Committee announcements, newspapers across the country have had front-page stories about the Federal Reserve actions to lower interest rates and boost spending and employment in the U.S. economy. Attention has only increased as the economy entered a recession beginning in March of last year and real GDP actually fell in the third quarter of the year. The announcements reflect serious concerns with the state and direction of the economy. This lesson is intended to guide students and teachers through an analysis of the actions the Federal Reserve began to take last year in an effort to strengthen the economy. An understanding of monetary policy in action is fundamental to developing a thorough understanding of macroeconomics and the U.S. economy.
Explore the connection between the economic indicators and real-world issues. These lessons typically can be done in one class period.
The Federal Open Market Committee decided today to keep its target for the federal funds rate unchanged at 1 3/4 percent.