ANALYSIS, COMMENTS, THOUGHTS, AND OTHER OBSERVATIONS IN DR. SKOSPLES' NATIONAL INCOME AND BUSINESS CYCLES COURSE AT OHIO WESLEYAN UNIVERSITY
Sunday, September 5, 2010
Bernanke: Fed will take action if economy falters
In this article Ben Bernanke says that the Federal Reserve will take steps to avoid the nation going into a "self-reinforcing price decline". The article specifies that there are three ways that the fed could prevent this. One is that the Fed could purchase more long-term securities. The second is that they could keep their benchmark interest rate near zero, and convince investors that it would stay there for a long period of time. And finally they could reduce the interest rates they pay banks to keep reserves.
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If the Fed takes these steps, what sort of effect will it have on the national debt?
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