BUSED 101 Chapter Notes - Chapter 2: Disinflation, Final Good, Monopolistic Competition
7 Oct 2016
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Document Summary
After 9-11 the federal reserve decreased the interest rate in order to help the economy bounce back. Many people were faced with the fact that they owed more for their homes then they were worth. After the collapse in 2008 obama introduced a billion economic stimulus package. One of the plans was to lower taxes. Lowering taxes can boost the economy by leaving more money in peoples pockets for them to spend or invest. In mid 2011 the government was getting very close to reaching the debt ceiling. The maximum amount that congress allows the government to borrow. If the government incurs a budget deficit they must borrow the remaining money. The us debt has grown every year since 1957. The government must repay the debt and the skyrocketing interest rate. Less money will be available for other uses. Services will be eliminated (student loans, veterans benefits etc. ) The federal reserve manages the u. s. monetary policy.
