AHRM 2304 Lecture Notes - Lecture 2: Federal Funds Rate, Gross Domestic Product, Procyclical And Countercyclical
25 Jan 2017
School
Course
Professor
I. Great Recession
a. The great recessio of 2007/2009 destroyed 20 percet of Aerica’s wealth i
home values and investments
b. Savings went up for individual households
II. Economic indicators
a. Gross Domestic Product
i. Nations broadest measure of economic health
ii. Reports how much economic activity has occurred
iii. Procyclical indicator-if the economy is going up then most likely GDP is
too
b. Unemployment rate
i. Percentage of labor force that is unemployed
ii. Countercyclical indicator
III. Inflation
a. Steady rise in the general level of prices
b. Inflation is measured by the consumer price index
c. Tracking prices for goods and services
d. Inflation reduces purchasing power
IV. Federal Reserve Board
a. Promote maximum employment and price stability
b. Set the federal funds rate
c. Rates Banks charge each other
d. If the economy is growing too fast, FED raises federal funds to increase
borrowing costs in an effort to reduce borrowing
V. Think like an Economist
a. Opportunity costs
i. Refers to a benefit that a person could have received, but gave up, to
take another course of action
b. Trade off
i. Giving up one thing for another
c. Utility
i. Ability of a good or service to satisfy a human want
VI. Economic outlook for the US
a. Jobs
b. Housing Sales
c. Consumer Spending
d. Business Spending
e. Inflation
f. Stock Market
VII. Financial Advice
a. Financial planners
b. Professional certifications
i. CFP
c. Compensation
find more resources at oneclass.com
find more resources at oneclass.com
