Instruction
Welcome to Economic Advisors Inc. Since tomorrow is your first day, I want you to report to the office at 8am. Youll be working on the Monetary Policy team. As you know, we have many clients that read our reports and our information helps them make informed decisions. Here is what we know from the last round of economic data:
Consumption and Investment is very sluggish
Unemployment is quite high at 9%
Inflation is very low at 0.4% (the historical average rate of inflation is about 2%)
Since your background is in Monetary Policy, we need your thoughts on what the FED might do. How does the FED policy you describe affect the economy? Remember, not all members are macro specialists so they dont necessarily know the mechanisms behind the macro economy, but they all have economics degrees. You need to be specific, but not about definitions or basic concepts. Eventually your team will write a recommendation to our clients describing how to shift their portfolios to respond to probable FED policy.