ECON 104

  

Examine the proposed Federal budget for 2018

Part A:

Go to: http://www.whitehouse.gov/omb/budget

open up “A New Foundation for American Greatness”

Then click on “The Budget Message of the President”

1. Which of the President’s “eight pillars of reform” do you think is the most

important?

open up “Major Savings and Reforms”

2. How much would be saved by the elimination of the McGovern‐Dole

International Food for Education program?

In the Appendix, look at the Department of Defense

3. Will the basic pay for military personnel increase in 2018? If so, by what

percent?

In the Historical Tables, open up table 2.1

4. In what year did individual income taxes first exceed $1 trillion?

In Analytical Perspectives, open up “Economic Assumptions”

5. What is the CPI predicted to be in 2018?

Part B ‐ Explore the Federal Reserve website (www.federalreserve.gov)

Click on Data, then on “Money Stock Measures – H.6”

6. What was the seasonally adjusted level of M1 in May 2016?

7. From September 2016 to September 2017, in how many months was demand

deposits higher than currency?

Still under Data, click on “Selected Interest Rates – H.15”

8. What was the Federal funds rate on November 1, 2017?

9. What happens to the interest rate on Treasury constant maturities as the

length of the T‐Bill increases?

From the Federal Reserve homepage;

Click on “About the Fed”, then on “Structure of the Federal Reserve System”

10. Which Federal Reserve Bank serves the state of Florida?

Part 3:

The Federal Reserve Bank publishes a report called the Beige Book eight times a year

that summarizes the current economic conditions in each of the 12 bank districts. This

report is used by the Federal Open Market Committee when deciding on monetary policy.

Go to www.federalreserve.gov/monetarypolicy/beigebook/default.htm

to read the most

recent Beige Book (October 18, 2017).

Go to www.federalreserve.gov/monetarypolicy/mpr_default.htm

to read about the most recent Fed actions (July 7, 2017).

Then answer the following questions:

a. What are the current economic conditions?

b. What is the most recent policy action taken by the Fed?

c. Based on your answers to a. and b., what policy action do you recommend the

Fed take at its next meeting? Explain your reasons.