Unemployment rate

1. Rounding to the nearest 0.1 percent, calculate the mean, median and mode for the Consumer Price Index – All Urban Consumers (CPI-U) for 2012, 2011 and 2002, separately. Show your work. If the three averages differ, explain why.

Do you think the Fed should have been more concerned about inflation in 2012 than they were in 2011 or 2002? Why, or why not?

2. Based on the shape of this graph, describe the Fed’s policy regarding the Federal Funds Rate from 2003 to 2013.

What kind of policy did they have in 2013—expansionary or contractionary? Explain your answer.

3. The Fed’s target unemployment rate is 6.5 percent. Based on this graph, describe how the Fed’s target unemployment rate compares with unemployment rates between 2000 and 2012.

Do you think this is a reasonable target rate? Explain your answer.


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