Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz

Exercise 4

Check the Federal Reserve Board's semiannual monetary policy reports to the Congress (www.federalreserve.gov/boarddocs/hh). In these reports, which are published every year in February and July, the Federal Reserve Board members provide economic performance forecasts. Using this information, answer the following questions:
a. How well did the Fed anticipate the economic performance of 2010
b. Explain why economic forecasts are not totally accurate.