Real Gross Domestic Product also known as, GDP, is how economist determine if a nation is growing or shrinking in size. It is never at the same level each year. In 1652, William Petty, came up with the basic concept of GDP to defend landlord’s against unfair taxation during warfare between the Dutch and English. Later, Simon Kuznet, developed the modern concept of GDP for a US congress report in 1934. GDP keeps everyone in the economy informed of economic production and growth. A significant change in GDP generally has an effect on the stock market. Investors worry about negative growth which is one of the factors that economist use to determine whether an economy is in recession. Inflation is the average level of prices increasing and deflation
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The Fed was established to provide the nation with a safer, flexible, and more stable financial system. “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economies long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” This is often called dual mandate and guides the Feds decision making in conducting monetary policy strategies. The Fed has a full employment goal for the US, 0% unemployment is not feasible, and it strives to obtain a 5% or lower unemployment …show more content…
Federal chairman, Ben Bernanke, expressed how unemployment remained unacceptably high. Monetary Policy is providing important support to recovery. Some Fed officials raised the concerns that the Fed was making extensive purchases that would be too difficult to recover from. Mr. Bernanke responded to these remarks with the facts of stocks rising and standard and poors 500 index climbed to 0.61 percent of the day. Senator Bob Corker felt the low interest rates would affect seniors and cause inflation. Mr. Corker accused Mr. Bernanke of caring about unemployment more than inflation, although the inflation record was in good standings. Low interest rates are beneficial in helping strengthen financial system and allowing debt levels to decline fostering
The Fed was established to provide the nation with a safer, flexible, and more stable financial system. “The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economies long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” This is often called dual mandate and guides the Feds decision making in conducting monetary policy strategies. The Fed has a full employment goal for the US, 0% unemployment is not feasible, and it strives to obtain a 5% or lower unemployment …show more content…
Federal chairman, Ben Bernanke, expressed how unemployment remained unacceptably high. Monetary Policy is providing important support to recovery. Some Fed officials raised the concerns that the Fed was making extensive purchases that would be too difficult to recover from. Mr. Bernanke responded to these remarks with the facts of stocks rising and standard and poors 500 index climbed to 0.61 percent of the day. Senator Bob Corker felt the low interest rates would affect seniors and cause inflation. Mr. Corker accused Mr. Bernanke of caring about unemployment more than inflation, although the inflation record was in good standings. Low interest rates are beneficial in helping strengthen financial system and allowing debt levels to decline fostering