Why the U.S. Economy Isn't at Full Capacity

What is the main reason given for why inflation isn't rising despite low unemployment?

• A technological slowdown

• Increased productivity

• A persistent demand shock

• Demographic changes

According to the Phillips curve, what is expected to happen if unemployment remains low?

• Wages will decrease

• Wages will increase

• Inflation will decrease

• Employment will decrease

What is a potential risk of maintaining low interest rates for a long period?

• Increased inflation

• Decreased borrowing

• Higher unemployment

• Debt accumulation

Which demographic group has seen a significant decline in labor force participation?

• Older adults

• Middle-aged workers

• Younger demographics

• Retirees

What factor is NOT considered a primary reason for the decline in employment rates?

• Increased education levels

• Technological advancements

• Aging population

• Decline in birth rates

What is suggested as a more effective tool than monetary policy for addressing economic issues?

• Trade tariffs

• Infrastructure spending

• Tax cuts

• Interest rate hikes

What is the recommended action for the Fed regarding interest rates in the current economic environment?

• Increase rates

• Maintain current rates

• Reduce rates to zero

• Eliminate rates entirely