Fed Chairman Tips and Tricks
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Top Tips for the Fed Chairman Game:
Inflation can be lowered when the federal funds are set higher, but this will also temporarily increase unemployment.
Unemployment rates can be lowered by setting the federal funds close to or below the inflation rate.
Pause Points:
After the first three month period has passed, pause the game. Draw students’ attention to the delay between rate changes and the effect on unemployment and inflation. What happens if a second change is made too quickly?
Pause again after the first year has passed and allow students to make additional inferences about the relationship between the federal funds and unemployment/inflation rates.
Misconceptions: