Question
https://www.marketwatch.com/story/yellen-says-she-thinks-fed-should-raise-interest-rates-a-bit-more-2018-10-30 Consider the article from MarketWatch called Yellen says she thinks Fed should raise interest rates 'a bit more'. Note: this article is not current,
https://www.marketwatch.com/story/yellen-says-she-thinks-fed-should-raise-interest-rates-a-bit-more-2018-10-30
Consider the article from MarketWatch called "Yellen says she thinks Fed should raise interest rates 'a bit more'." Note: this article is not current, it is from the fall of 2018. At that time, the economy was doing extremely well. Keep that in mind as you are answer the questions. Read the article and answer the following questions: a. What does Yellen mean when she says that the Fed should continue to increase interest rates to "slow down the economy?" In other words, what does "slow down the economy" mean? What market turmoil is she referring to? b. What does the article mean when it says that "[...] it could end in a recession?" Why would the Fed ever undertake policies that could lead to a recession? c. If the Federal Reserve continues to increase interest rates, what could the current administration do (via fiscal policy) to counteract this monetary policy? What are the potential pitfalls that the administration's fiscal policy could have in the longer term?
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