Is the Fed Willing to Let U.S. Economy Run Hot?

What was the market's reaction to the presidential election in terms of fiscal policy expectations?

• No change in bond prices

• A bond sell-off due to expected large fiscal stimulus

• An increase in bond prices due to expected fiscal tightening

• A decrease in bond prices due to expected fiscal tightening

What is the likely consequence of injecting additional fiscal stimulus into an economy close to full employment?

• No change in inflation

• Increased inflation

• Deflation

• Decreased inflation

What is a potential risk for the Fed if it is perceived as obstructing economic growth?

• It could lead to a stronger dollar

• It could lead to a decrease in inflation

• It could become unpopular with the White House

• It could increase employment rates

How does the ECB's situation differ from the Fed's in terms of economic cycle?

• Both are at the same point in the economic cycle

• The eurozone is behind in the economic cycle compared to the US

• The ECB is not concerned with the economic cycle

• The eurozone is ahead in the economic cycle compared to the US

What has caused the recent spike in headline inflation in the eurozone?

• Decreased government spending

• Increased exports

• Rising oil prices

• Increased consumer spending

What major political events are considered risks in Europe?

• Trade agreements with China

• Elections in France and Germany

• Elections in Italy and Spain

• Brexit negotiations

What is the primary concern regarding Greece in the context of European risks?

• It is unaffected by eurozone policies

• It is leading the eurozone recovery

• It is no longer a systemic risk

• It is a systemic risk