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onclusion, we will make recommendations on how Bank of Green should conduct its future business with the declining economy.

分析数据-Analyzing Data

Comparing the forecast for the Bank of Green for the year 2006 and analyzing it with the historical performance of the economy the data shows that GDP is higher than the past GDP's. If you look at the nominal GDP you can see whether hit by inflation or deflation it is still higher than the past GDP. If you take a look at the real GDP and compare it to the historical data, you will notice that the numbers began to lower slightly from the past, especially when you compare it to the year 2005 then it is lower but it is consistent with the 2000 years.

When looking at the set of data provided by Bank of Green and comparing the projected quarterly growth rates of the economy during 2006 with the average since 1990 we have used the percent change measure of GDP. This does explain why investors are concerned since in the past years the percent change has not been so far apart. As we calculated the expected rate of inflation for 2006 it came out to 7.4% which has not been so high since 1980.

联邦储备系统预测-Federal Reserve Prediction

The Federal Reserve gains its capital by loaning money to banks. Banks use the Federal Reserve as a 'life-preserver', and receive these needed funds to loan out to the general population. Banks use what is called a money multiplier. This ultimately means that once they loan out these extra funds, they multiply it to reach a higher balance which is how the banks pay the Fed and essentially make money for themselves. It might come as a surprise, but the general public can predict or forecast when a recession will happen. There is so much information available to the public that all you really need to do is use any search engine and look up information regarding the economy and all other factors that would contribute to a recession.

In the event of a recession, the average person generally does two things. One, they keep all extra income themselves and decide not to invest their money in investment options in the economy. Or two, the event of the public being worried of the value of their money while being invested in things like the stock market, it is assumed that they will try to liquidate their investments as to not lose any value of the money they have committed. This is where the Federal Reserve becomes very important. The Federal Reserve has to react to these different changes in the economy and adjust to make sure that spending level does not drop. If this were to occur, the public will make sure to liquidate all of their assets in to cash causing a devastating blow to the economy.

The goal of the banks to ultimately achieve is to be able offer the lowest interest rates on loans as possible. Doing this will allow more people to receive these loans and invest their money in the economy. A way for these low interest rates to be possible is to increase the money that is being lent out by the Federal Reserve to the banks. Sometimes having this extra money in the hands of the consumer can be a bad thing. Demand will rise along with the price of goods as well. If people have more money to spend, they are bound to buy more products that will ultimately lead to a hike in price.

We will use the strategies of aggregate demand and aggre