eco hw 4213902 2

Prompts: In general, explain the actions of the European Central Bank (the European counterpart of the US Federal Reserve) in terms of what we’ve learned in class–why are they holding rates low?  Why are they starting to purchase bonds in large quantities?  How would this explain the analysts’ expectations of growth of GDP increasing from 1.0% to 1.5%?  Why is what Europe does important to the United States?  Why might the United States be tapering off their Quantative Easing (purchasing bonds at a high rate) recently, and what might have prompted the European Central Bank to start purchasing bonds at a high rate?

Why the focus in interest rates and unemployment and why can they keep the interest rates low?  How do bond purchases tie in with the interest rates?

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