a problem foreconomists, inflation. The Growth of demand has continued to outpace that ofsupply, as evidenced by a decreasing pool of available workers (CRUTSINGER). This has led economists to believe that employers will begin to woo employeesthus increasing prices and causing inflation. The goal for the federal governmenthas now become to slow down inflation. There have been several differentpolicies that have been proposed to meet this goal but the most prominent onedeals with interest rates.Recently, the federal government has given many hints of a possibleincrease in interest rates. Mainly they have been hinting about an increase in therates at which banks loan each other money which will in turn increase the rates atwhich the banks lend out money to the public. This plan of action is not beingsupported by everyone. Recently during a day of extensive trading on Wallstreet,the market had been doing really well. There had been a gain of 106 points for theday until the final two hours of trading when there was a drop of 124 until themarket closed with a net drop of 0.64 points. This drastic drop in the market afterthe announcement of possible interest rate increases shows that the majority ofinvestors do not support this policy. they are opposed to the increase in interestrates in order to control the inflation due to the low levels of unemployment. The main supporters of this policy is the federal government. The reasonfor their strong support of this policy is their fear of inflation. They feel that ifthey raise the interest rates then that will keep companies from wooing theiremployees thus keeping their prices at current levels. I believe that having a low rate of unemployment is a spectacularachievement for an economy. The lower the unemployment rate, the more peoplethat are working which in turn help produce more for the countrys economy. Thecurrent policy proposals seem to be a bit unnecessary at the moment. With...
