1. Explain how each of the following changes the money supply.
a. the Fed buys bonds
b. the Fed raises the discount rate
c. the Fed raises the reserve requirement
2. During the early 1930s there were a number of bank failures in the United States. What did this do to the money supply? The New York Federal Reserve Bank advocated open market purchases. Would these purchases have reversed the change in the money supply and helped banks? Explain.
3. List and define any two of the costs of high inflation.
4. List the factors that might influence a country's exports, imports, and trade balance.
5. What is the difference between monetary policy and fiscal policy?© BrainMass Inc. brainmass.com October 16, 2018, 10:33 pm ad1c9bdddf
This solution is comprised of answers related with Fed and money supply.
Describe three ways in which the Federal Reserve can change the money supply
Describe three ways in which the Federal Reserve can change the money supply.
If the Federal Reserve is going to adjust all of these tools during an economy that is growing too quickly, what changes would they make?
If the Federal Reserve is going to adjust all of these tools during an economic recession, what changes would they make?
What changes, if any, to the current condition of these tools would you make at the next meeting of the Federal Reserve? Explain why and the benefits/drawbacks of this strategy.
Objective: Identify current trends in macro and microeconomics.
Analyze the relationship between fiscal and monetary policy in an open economy.
Critically analyze the role of government in a market economy.
Use effective communication techniques.
There are three tools. See chapter 14. Use the link to the FED; the link is posted to Questions Asked and Answers Shared for Unit 5 Describe each tool and how it is used to achieve it desired effect on the US money supply State how the FED will use each tool to achieve the desired effect on the US money supply in Part 2 State how the FED will use each tool to achieve the desired effect on the US money supply in Part 3 In part 4 comments on the current FED policy; make any suggestions that you believe should be considered by the FED. Before you submit the assignment, look for each of the tools in part 2 and in part 3. If you do not read each tool in part 2 and in pat 3, the assignment is incomplete.View Full Posting Details