Read the 2 articles Fed Official Expects Growth and are Inflation Expectations Rising from the Ashes? The cites are: http://pittsburghlive

Several of these questions can be found on the federal reserve web site, http://www.federalreserve.gov/

The articles mention the effects of hurricanes. We can surmise from the comments given that inflation is often linked to disasters. In the case of hurricane Katrina, it was the increased cost of energy that fueled inflation. When oil prices rise, many other sectors are affected. For example, the trucks that transport our food use gasoline. The supply of gasoline was restricted for a time because of hurricane damage to US golf coast refineries.

There is some debate about the fourth question. Because the President appoints the 7 members of Board of Governors, and the Chairman of the Fed, and the Senate confirms them, you might say that voters have an indirect say. Congress constitutionally retains the power to to coin and print money (Article I, Section 8), and could disband or limit the Federal Reserve if they so chose. They could also apply political pressure or informal pressure upon the Reserve for various reasons, although this would defeat the purpose of an independent reserve, and is rarely (if ever) done. The implementation of monetary policy is done on a day to day basis, so you could also say that voters have no say. The President doesn't tell the Fed chairman what to do once he is appointed.

Several indexes can be used to measure inflation. Among the most common is CPI, or consumer price index. This index uses the prices of 400 items that buyers typically use. PPI, or producer price index, is family of indexes that measure the average change over time in selling prices by domestic producers of goods and services. PPIs measure price change from the perspective of the seller. No index is entirely reliable.

Inflation is a concern because people today see prices rising while their incomes remain stagnant. Even when their wages to increase, it is not generally enough to keep up with certain sectors, such as college education and prescription drugs. Thus their purchasing power is reduced.

The eighth question is one you can answer as a student. What kinds of things do you buy? Obviously you need less gas if you live on campus than someone who commutes to work. Because the items you buy are different, your exposure to inflation will differ as well.

Although not necessary to complete this assignment, I think you should be aware of the difficulties the Fed faces as it attempts to control of inflation. This requires both that they be able to forecast the future path of the price level and have estimates of what impact policy changes have on that path. Inflation is very difficult to forecast at even very near horizons. The state of the economy will dictate how a given policy will affect inflation, but the state of the economy cannot be known with certainty, either. How close is the economy to capacity? This is the type of question the Fed must answer before it can act.