U.S Interest Rate Behavior

ECO 306 Final Project I Guidelines and Rubric

Overview The first final project for this course is the creation of an informative presentation. The presentation will analyze U.S. interest rate behavior over a 10- to 15-year period during the last 50 years. Through your research, you will examine economic trends and risks, and the impact of monetary policy on interest rates. This presentation will provide an opportunity for you to develop an understanding of interest rate behavior. By analyzing a sufficient period of time, you will identify trends and changes in interest rates and witness the impact that key economic events have on interest rate determination. In doing this, you will develop an appreciation of the relationship between policy targets and market factors, which impact economic activity. The final product will be submitted in Module Three. In this assignment, you will demonstrate your mastery of the following course outcomes:

 Explain the determinants and behavior of interest rates as they relate to markets

 Analyze the relationship between monetary policy and the economy for informing responsible business decision making

Prompt For this final project, create a PowerPoint presentation of 8–10 slides analyzing U.S. interest rate behavior over a 10- to 15-year period during the last 50 years. You will access information in the Federal Reserve Economic Database (FRED) and create a presentation that includes speaker notes and visual representations of your findings. Specifically, the following critical elements must be addressed:

I. Overview: Define the specific interest rates and time period that you are analyzing, and explain why you chose them.

II. Interest Rates A. Explain interest rate trends over the time period and whether they have been high or low by historical standards. B. Using FRED tools, visually illustrate changes in interest rates during the time period. C. Describe economic risk factors that have impacted interest rates in the time period and what kind of impact they had. Consider bankruptcies,

financial crises, geopolitical factors, and so on. D. Describe underlying economic conditions that impacted the activity of these interest rates during the time period.

III. Monetary Policy

A. Discuss the impact of interest rate changes on general business decision-making. Consider expanding or contracting operations, deciding to undertake or postpone additions of capital (i.e., increasing productive capabilities), or increasing or decreasing inventories.

B. Explain the causal relationship between the federal funds rate and market rates of interest. C. Using your analysis of interest rates during the time period as a guide, explain the internal and external impacts on the economy.

Deliverable Final Submission: Presentation Submit your presentation in Module Three. It should be a complete, polished artifact containing all of the critical elements of the final product. It should reflect the incorporation of knowledge and feedback gained up to this point in the course. This submission will be graded with the Final Project I Rubric.

Final Project I Rubric Guidelines for Submission: Your presentation should be 8–10 slides with speaker notes, visual representations of your findings, and citations adhering to the latest edition of APA formatting.

Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value Overview Meets “Proficient” criteria and

explanation demonstrates exceptional balancing of brevity and detail

Defines the specific interest rates and time period being analyzed, including an explanation of why they were chosen

Defines the specific interest rates and time period being analyzed, including an explanation of why they were chosen, but definition is cursory or explanation is incomplete

Does not define the specific interest rates and time period being analyzed

4

Interest Rates: Trends

Meets “Proficient” criteria and explanation demonstrates a complex grasp of how interest rate trends compare to historical standards

Explains interest rate trends over the time period and whether they are high or low by historical standards

Explains interest rate trends over the time period and whether they are high or low by historical standards, but explanation is illogical or contains inaccuracies

Does not explain interest rate trends over the time period

11

Interest Rates: Changes

Meets “Proficient” criteria and illustration demonstrates a masterful use of FRED tools to show changes in interest rates

Visually illustrates changes in interest rates during the time period using FRED tools

Visually illustrates changes in interest rates during the time period using FRED tools, but illustration is unclear or incomplete

Does not visually illustrate changes in interest rates during the time period using FRED tools

11

Interest Rates: Risk Factors

Meets “Proficient” criteria and description demonstrates a sophisticated awareness of how economic risk factors impacted interest rates

Describes economic risk factors that have impacted interest rates in the time period and what kind of impact they had

Describes economic risk factors that have impacted interest rates in the time period and what kind of impact they had, but description is incomplete or impacts are unrelated

Does not describe economic risk factors that have impacted interest rates in the time period

11

Interest Rates: Economic Conditions

Meets “Proficient” criteria and description demonstrates a complex grasp of underlying economic conditions that impacted interest rates

Describes underlying economic conditions that impacted the activity of these interest rates during the time period

Describes underlying economic conditions that impacted the activity of these interest rates during the time period, but description contains inaccuracies or is illogical

Does not describe underlying economic conditions that impacted the activity of these interest rates during the time period

11

Monetary Policy: Business Decision-

Making

Meets “Proficient” criteria and discussion demonstrates a sophisticated awareness of the relationship between interest rate changes and general business decision-making

Discusses the impact of interest rate changes on general business decision- making

Discusses the impact of interest rate changes on general business decision- making, but discussion is unclear or unrelated to the impact

Does not discuss the impact of interest rate changes on general business decision- making

16

Monetary Policy: Causal Relationship

Meets “Proficient” criteria and explanation demonstrates a complex grasp of how the federal funds rate and the market rates of interest influence each other

Explains the causal relationship between the federal funds rate and market rates of interest

Explains the causal relationship between the federal funds rate and market rates of interest, but explanation is cursory or has gaps in logic

Does not explain the causal relationship between the federal funds rate and market rates of interest

16

Monetary Policy: Impacts

Meets “Proficient” criteria and explanation demonstrates a sophisticated awareness of how the interest rates impacted the economy

Explains the internal and external impacts on the economy, using the analysis of interest rates during the time period as a guide

Explains the internal and external impacts on the economy, using the analysis of interest rates during the time period as a guide, but explanation is incomplete or does not relate to interest rate analysis

Does not explain the internal and external impacts on the economy, using the analysis of interest rates during the time period as a guide

16

Articulation of Response

Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to- read format

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

4

Total 100%