Economics Class Discussion 2, Cite Sources, economics homework help (500 Word Min)

Each week, you must answer questions provided by the Professor on articles from The Wall Street Journal or The New York Times. You are expected to participate in these discussions each week.

WSJ, 02/12/16 – Low Inflation, Which Complicates Fed Plans, Cheers Consumers

  1. Why is the Fed concerned about low inflation?
  2. What is wrong with deflation?
  3. When it comes to inflation, what are the major drivers for inflation? (Think economy demand and economy supply)
  4. How is inflation viewed differently from the supply side (cost of goods sold) versus demand side (purchase of goods)?
  5. How does the Fed mechanically manipulate interest rates? (Think purchase and sale of bonds)  The article talks about the Fed’s concern with inflation cycle, what other economic fundamental is the Fed trying to balance against the inflation cycle?  (this is where a key word search on “Fed” in the course material helps).

There’s plenty of online material regarding deflation.  Check out this Paul Krugman article:  Why is Deflation bad?

Hope these questions/suggestions help develop your posts.