Question

How might you respond in a hypothetical FOMC meeting? Answer the questions below to determine your policy leanings. 1 Would you be more concerned with your cousin losing his/her job or prices increasing faster than your income? Cousin losing job Equally concernedPrices rising Do you agree or disagree with this statement: "Markets do the best job at allocating resources to maximize economic potential and financial market outcomes. Government policy or regulation inhibits this." 2 Strongly agreeSomewhat agreeNeutral Somewhat Disagree Strongly Disagree Do you agree or disagree with this statement: "The U.S. government and Federal Reserve should prioritize their policies above all other objectives to ensure those that want to work have the best opportunities to do so." OStrongly agree Somewhat agree Neutral Somewhat Disagree Strongly Disagree 4 If you had your choice, would you rather be given

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Answer 1

a) Loosing a job is more problematic than the increase in the price. If he is loosing the job his income will be reduced to zero. But an increase in the price will only hurt for a short period of time increasing the wages later. The answer is "A".

b) Strongly agree, markets are inherently efficient than the government intervening and allocating the resources. Government allocations are mired with corruption and inefficiency. The answer is "A".

c) Somewhat Agree, government should only manage the economic conditions ensuring there are enough opportunities available for the people in the market and act accordingly.

d) $500 one year from now. Even after adjusting the inflation it is the highest amount one can get.