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Economics 001A Macroeconomics Macroeconomic Case Studies Stephen Rossi Economics 001A M 630-915 Slowing the US Economy The article titled Fed Unlikely to Alter Course by John M Berry of the Washington Post takes an interesting look at actions that Alan Greenspan his colleges of the Federal Reserve have been taking over the last 9 months to slow the economic growth of United States The astonishing growth rate of 73 is fueled by an economy that is in the midst of a high tech revolution The article also explores the contrasting view of other economists that say that the Fed has increased interest rates too much in its attempts to slow the economy The means by which Alan Greenspan and the Federal Reserve have chose to slow the economy is through a monetary policy or more specifically an increase in the national interest rate The article states that the Fed officials have come to a broad agreement that they will keep raising the rates until growth slows to a more sustainable pace to make sure inflation stays under control Because of the booming economy and the investment in the stock market the exchange of money has increased for goods and services which in turn increases the price level or the quantity of money demanded By increasing the interest rates the Fed commits itself to adjusting the supply of money in the United States to meet that rate at a point of equilibrium If the interest rate is increased less goods and services are demanded and therefore will slow down the economy and reduce the rate of inflation The article points out that as stock prices have risen over the last
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