The Federal Reserve Play Controlling Unemployment And Inflation

1154 Words May 26th, 2016 null Page
“The Federal Reserve plays a major role in controlling unemployment and inflation. They rely on economists to give them data in order to control these areas. The economists use data to determine if the economy is growing or shrinking in size, the measure of total output calls the real gross domestic product is used. The real gross domestic product (Real GDP) is the market value of all final goods and services produced within a country in a giving period. Every legal goods and services paid for that can be tracked makes up the Real GDP. The market value is the benefits of all final goods and services produced even if the total output falls. If the Real GDP falls significant for a certain period of time the economy would be in a recession. This would be determined by real income, employment, industrial production, wholesale and retail sales.” (http://www.saylor.org/books, p. 751 – 752, 975 - 976) “Inflation is the increase in prices for goods and services over an extended period of time. When inflation rises you will not be able to purchase the same amount of goods and services for the dollar amount before the price rises. The value of a dollar gives us purchasing power, when inflation rises the power of money declines. We can only speculate on the cause for the increase in prices. With inflation the economy could suffer greatly because people would not be able to afford to buy goods and services as before.”…

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