3. Economic projections for 2011-2013, and beyond Aa Aa The following table pres

Question

3. Economic projections for 2011-2013, and beyond Aa Aa The following table presents economic projections for growth of real output, the unemployment rate, and inflation for the years 2011 to 2013. These projections were submitted by the members of the Board of Governors and the presidents of the Federal Reserve Banks as discussed at the June 21-22, 2011, FOMC meeting. The projections were based on information available at the time of the meeting and on each participant's assumptions about factors likely to affect economic outcomes, including his or her assessment of appropriate monetary policy Appropriate monetary policy is defined as "the future path of policy that each participant deems most likely to foster outcomes for economic activity and inflation that best satisfy his or her interpretation of the Fed's dual objectives of maximum employment and stable prices." Longer-run projections represent each participant's assessment of the rate to which each variable would be expected to converge over time under appropriate monetary policy and in the absence of further shocks Variable Central Tendency 2011 2.7 to 2.9 3.3 to 3.7 3.1 to 3.3 3.5 to 4.2 8.6 to 8.97.8 to 8.2 8.4 to 8.77.6 to 7.9 2.3 to 2.51.5 to 2.0 2.1 to 2.8 1.5 to 1.8 1.3 to 1.6 Longer Run 2013 3.5 to 4.2 2.5 to 2.8 3.5 to 4.3 2.5 to 2.8 7.0 to 7.5 5.2 to 5.6 6.8 to 7.25.2 to 5.6 1.5 to 2.0 1.4 to 2.0 1.4 to 2.0 1.4 to 2.0 2012 Change in real GDP April projection Unemployment rate April projection Personal consumption expenditures (PCE) inflation 1.7 to 2.0 April projection Core PCE inflation April projection 1.2 to 2.0 1.4 to 2.0 1.3 to 1.8 1.7 to 2.0 NA NA

Explanation / Answer

GDP Less than anticipated and inflation more than the long term inflation.

True, True and False.

reduce the amount of reserves and thus increase the money supply.

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