DQ

“Changes in wealth, expectations, interest rates, and household debt will shift the consumption schedule in one direction and the saving schedule in the opposite direction” (McConnell, Brue, & Flynn, 2021, pp. 201-202). On March 15, 2020, the Federal Reserve Open Market Committee voted to maintain the federal funds rate in a target range of 0 to 1/4 percent. The U.S. Senate is considering legislation to inject a nearly $2-trillion stimulus into the U.S. economy. Roach (2020) posits that “…decisive health action matters more than financial decisions in the COVID-19 crisis” (para. 5). The question may be one of whether the stimulus injection is best focused on overhauling and building-out the capacity of the U.S. health system infrastructure or sustaining consumption priorities and behaviors during the crisis?

Use the Roach (2020) article and the March 15 announcement by the Federal reserve’s Open Market Committee to project and explain the impact you think Covid-19 may have on changes in wealth, expectations, interest rates, and household debt as the U.S. attempts to fashion a strategic response to a global pandemic.