[Online Document Assignment:]
EIA Activity: What the Fed Wants, the Fed Gets
Click on the links on the right to answer the following questions.
Use Link 1 to answer the following questions. True or False: A business cycle index is used to determine the future direction of a business cycle.
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True or False: The stock market does not respond to investor perceptions regarding the future direction of the business cycle.
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True or False: An increase in the business cycle index means that the business cycle conditions are worsening.
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Use Link 2 to answer the following question. True or False: The Federal Reserve discussed steps to lower the federal funds rate further at the Federal Open Market Committee (FOMC) meeting held on September 16 and 17, 2014.
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Use Link 3 to answer the following questions. True or False: From 2004 through2014, the Consumer Price Index (CPI) was highest during September 2005.
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True or False: From 2004 through2014, the Consumer Price Index (CPI) was lowest during November 2008.
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Why do consumers usually expect high inflation in the future? Explain.
What do producers usually expect high inflation in the future? Explain.
Which is worse for the economy to experience, inflation or deflation? Explain why.
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