Griffin Pontius chapter 10 question 7

       Of the things the discussed in this chapter, the idea that economic growth has a speed limit, was a very interesting analogy.  When we go "over" this economic speed limit, we risk inflation.  In order to curtail this,  We raise interest rates.  The exact oppisite can be said if we go "under" this speed limit; if we go under the speed limit, we risk deflation.  Our combatant to this is to lower interest rates, by doing this, we should return to the legal limit of about 3%.
       As I read this chapter, my understanding of how much power the federal reserve has and how they can control the economy.  The author talks about how after the 9 11 attacks, the Federal Reserve realeased a two sentance statement that cut intersest rates by .5%.  Also by reading this chapter, I learned how important the federal reserve really is, up until reading this, I had heard the term "Federal Reserve" kicked around, and on the news, but I had never really understood what it was.