Q1. Define money and list the functions it performs. Q2. Assume the government cuts its purchases by $120 billion. As a result, the budget deficit is reduced by $40 billion, private domestic saving decreases by $10 billion, disposable personal income decreases by $80 billion and the trade deficit is reduced by $15 billion. By
Why would the Federal Reserve want to control the size of the money supply? Compare active and passive approaches to the economic policy. Which approach would seek to shrink the size of the government? What determines the quantity demanded of money? What three control mechanisms does the Federal Reserve have at its d
-If the Fed cuts the quantity of money, explain how each of the following items change. a) Business' purchases of new capital equipment. b) Households' purchases of new cars and houses. c) Foreign purchases of U.S.-made goods and services. d) Americans' purchases of Canadian-made goods and services. -What is th
What's wrong with the following statement: If two people buy an airplane ticket from Detroit to San Francisco for $450 round-trip, the opportunity cost of that flight is the same for both of them.
"What's wrong with the following statement: If two people buy an airplane ticket from Detroit to San Francisco for $450 round-trip, the opportunity cost of that flight is the same for both of them." In the case where there is no explicit accounting or monetary cost (price) attached to a course of action, or the explicit acc
1. Go to the St. Louis Fed's web site and look at the graph of target federal funds rates over the last few years: http://research.stlouisfed.org/fred2/series/DFEDTAR?cid=118 Notice that from January 2001 until June 2003, the Fed lowered the target federal funds rate in steps from 6.5% all the way down to 1% and left it ther
Please let me know if you can help with the following: This post asks about comparing and contrasting two specific people, events, or organizations. No personal, political or religious topics. Topics should be focused on business, workplace and career communications. You may write about interests such as sports, music
I need help understanding the following MBA macroeconomic problems: a. What are the tools used by the Federal Reserve to control the money supply? b. How do these tools influence the money supply and in turn affect macroeconomic factors? In a 1,400-2,100-word APA-formatted analysis, discuss monetary policy and its effect on
I need to answer these questions related to the Monetary Policy Report to Congress? Characterize the state of the economy from the report? Is the Fed more concerned about inflation or possibility of recession? What is the stated direction of recent monetary policy? What policy actions has the Fed taken to confirm th
1. There are several tools the Fed uses to implement monetary policy. A) Briefly describe these tools. 1) Reserve Requirement-requires banks to hold a fraction of deposits. 2) Discount Rate-the amount the Feds charge banks that borrow from them. 3) Open Market Operations- the buying and selling of U.S. government bonds.
Can you please assist me with selecting a major TRADE partner (COUNTRY) for the US and research if they have a CENTRAL BANK in charge of Monetary Policy just as we have the FEDERAL RESERVE in the U.S. Discuss the latest change this central bank made to interest rates in that country and briefly discuss why.
Two goals of monetary policy in the United States are price stability and full employment. Are these goals always consistent with each other? Explain with the help of the appropriate graph(s).
Master Card has a series of cute commercials that list a series of accounting items and costs leading to a priceless product. Cell phones are often advertised as being free. In economics, it is said that nothing of value is either free or priceless, everything has a price. Take something from your experience, that is alle
What is the difference between contractionary and expansionary monetary policy? What are the pros and cons of using expansionary and contractionary monetary policy tools under the following scenarios; depression, recession, and robust economic growth? Which do you think is more appropriate today?
Money and interest rates are important to individuals and businesses making decisions to finance purchases. The following articles assess conditions for finance purchases and important aspects of monetary policy. Tom Woodruff has written an interesting and to-the-point article, "A borrower's guide to forecasting interest rat
How might this adage be relevant to expansionary (as opposed to contractionary) monetary policy?
Explain how each of the three tools of monetary policy may be used by the Fed to expand and to contract the money supply. Good internet sources: [FRB on Monetary policy and monetary policy instruments: "Monetary policy is made by the Federal Open Market Committee, which consists of the Board of Governors of the Federal Res
Write a brief history of the FEDERAL RESERVE system and delineate the role the Fed has in designing and implementing U.S. Monetary policy. Identify the THREE tools the FED has available to influence Money Supply and interest rates. 350 words
QUESTION 1 (a) Using an appropriate diagram, explain clearly why a consumer must be in equilibrium when the marginal rate of substitution is equal to the ratio of the prices of the goods consumed. (b) Use an appropriate diagram; explain how indifference curve analysis can be used to derive a demand curve. QUESTION 2
3. The table below shows the components of M1 and M2 in billions of dollars for the month of December in the years 1995 to 2004 as published in the 2005 Economic Report of the President. Complete the table by calculating M1, M2, currency in circulation as a percentage of M1, and currency in circulation as a percentage of M2. Wh
You are given the following two IS curves that show how real GDP (Yt) in the current time period t depends on the current interest rate and interest rates in previous periods, where rt is the interest rate in time period t. Furthermore each time period corresponds to a quarter or three months. 1. Yt= 8800-25Rt-25Rt-t - 25Rt
Explain the difference between expansionary monetary policy and contractionary monetary policy. Give a detailed explanation including examples. Give work cited if needed. Please post an original response. Answer needs to sound from a Business College student.
Explain the difference between expansionary monetary policy and contractionary monetary policy. also, Suppose when income is $10,000, aggregate expenditures are also $10,000. If income were hypothetically $0, aggregate expenditures would be $2,500. a. At an income of $10,000, what are induced expenditures? b. At an inc
Please note only a brief description of why the statement is T or F is needed, Also please note that this is for a discussion and NOT an assignment. Thus, it can be brief. Thanks Evaluate whether the following statements are true or false, and explain your answer: a. A trade deficit occurs when the government spends more
TWO QUESTIONS: 1. under a fixed exchange rate system, expansionary monetary policy depletes foreign reserves central bank. IS-LM diagram 2. ASSUME LAST YEAR'S REAL GDP WAS 7,000, THIS YEAR NOMINAL GDP IS 8,820, AND THE GDP DEFLATOR FOR THIS YEAR IS 120. WHAT WAS THE GROWTH RATE OF REAL GDP?
Please provide a step-by-step explanation: "Under a fixed exchange rate system, contractionary monetary policy increases foreign reserves at the central bank." Comment on this statement with the help of an IS-LM diagram.
Please assist in this paper. I need some help. Thanks Prepare a 700-1,050-word paper on the U.S. Federal Reserve monetary policy. Be sure to address the following points in your paper: 1) Characterize the state of the economy. 2) Is the Federal Reserve more concerned about high inflation or the possibility of a re
What is the impact of a trade deficit on the exchange rate value of the dollar? Address the economic motivations underlying international trade. Provide an actual (real-world) example that could be used to demonstrate the price inelasticity of demand for a given good.
D Q week 5 1. What is the impact of a trade deficit on the exchange rate value of the dollar? Make sure you explain how transactions in the foreign exchange market (as a result of the trade deficit) result in price pressures placed on this change exchange rate. 2. Address the economic motivations underlying internat
True/False 1. If productivity and wages both rise by 3 percent, then the aggregate supply curve shifts up. 2. The larger the mpc, the more repercussions there are from a change in expenditures or production and the greater the multiplier. 3. Government policy can affect business investment by al
Week 3: Discussion Questions 1 What are the uses of money and how do banks create money? 2. Is monetary policy conducted independently in the US and is the intended effect always achieved? Why or why not? 3. What is the difference between contractionary and expansionary monetary policy? What are the pros and cons of usi
The topics of macroeconomics - inflation, unemployment, interest rates, and exchange rates - are the subject of newspaper headlines and television stories every day. In your own words, discuss how these concepts relate to each other.