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The website of the Open Market Committee of the Federal Reserve System may be found at:
http://www.federalreserve.gov/monetarypolicy/fomcminutes20120313.htm
1. Please read the article then, answer the following questions, based on it in 2-3 pages.
2. What exactly do the minutes say or imply about recent movements (and the outlook) in each of the following?
a) consumption
b) investment
c) government spending
d) exports and imports (if not discussed explicitly in the statement, then discuss the likely implications of conditions in other countries)
e) aggregate supply
3. In each case, please explain what factors lead them to each conclusion. (you may quote them so long as the quote is clear and short).
4. did the Fed think the economy was ALREADY in an inflationary gap, a recessionary gap, or neither? On what basis can you conclude this? What do they see happening in the future to this gap?
5. Represent the current or future scenario in a graph, using AD/AS theory.
6. what do they propose to do with monetary policy as a result?
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