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Question: Reading the minutes of the FOMC: The Federal Open Market Committee (FOMC) is the formal name of the group chaired by Bernanke (and his successor) that meets every 6 weeks or so to set monetary policy in the United States. Immediately after the meeting, the FOMC issues a statement consisting of a few paragraphs that summarizes its position. Then, 3 weeks later, the FOMC releases the minutes of its meeting. These minutes contain extensive details about the issues that were discussed in the meeting. Suppose your job is to explain Federal Reserve policy to the CEO of a corporation. Do a Web search for the latest FOMC minutes. Then answer the questions below:
(a) What action did the FOMC take, if any, regarding the level of the fed funds rate? Why did it make this choice?
(b) Pick a paragraph or two from the FOMC minutes, and quote it in your answer. Using the short-run model, explain, using graphs and words, the economic consequences of the events in the paragraph(s) you've quoted. You do not need to analyze anything else in the economy; just focus on what you've chosen.
(c) Pick one other thing that is mentioned in the minutes that you do not understand (for example, a term with which you are unfamiliar). Do some research to discover its economic significance, and explain it in two or three sentences.
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