What Factors Can Start a Cost-Push Inflation? What Must the Fed's

question 27

Essay

What factors can start a cost-push inflation? What must the Fed's response be for the inflation to continue?

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Definitions:

Funds

Financial resources set aside for a specific purpose or investment vehicle pooling investors’ capital for the purpose of investing in securities and other assets.

Abnormal Return

Returns on a security that differ from the expected rate of return, often adjusted for risk.

Bogey Portfolio

A reference portfolio used to gauge the performance of an investment portfolio.

Asset Classes

Categories of assets, such as stocks, bonds, real estate, and cash, that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations.