Ch 10

What most interested me in chapter 10 was the fundamental steps the Federal Reserve takes to correctly distribute money. We talk about looking at the long term but in this case it was surprising that it is inefficient to look at the long run because our nations investments and expenditures rapidly change. I always assumed that a fast growing economy equaled a good economy. Without considering inflation and the stability of the current economy it seemed reasonable. Though this is not the case, which highlights the importance of the ferpderal reserve. Also the "purchasing power" we give to money fascinated me because the physical piece of paper that money is, is valueless. Yet, emotions are evoked whenever we see a dollar bill-validating its worth that we have given it. The questions I had from this chapter pertained to inflation and what our effect on it is. In my head I think of inflation as a balloon waiting to pop. Will our economy or any other nations economy ever pop, leaving all currency valueless? I there a way to efficiently reverse inflation?