I understand that monetary policy is an important tool of the federal reserve to regulate the interest rates and money supply which impacts the currency movement. It is also my understanding that the economy can adjust itself. Is it the fact that the economic adjustment takes too long? There must be a reason why the US does not utilize a “wait and see” approach.
Explain how monetary policy and actions by the Federal Reserve influence national economic goals of achieving full employment, controlling inflation, sustaining adequate growth, and achieving a stable balance-of-payments position? Which of these national economic goals have recent actions by the Federal Reserve addressed?
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.
B) Explain how the Fed would use each tool in order to increase the money supply.
2. Suppose the banking system has vault cash of $1,000 deposits at the Fed of $2,000, and demand deposits of $10,000.
A) If the reserve requirement is 20 percent, what is the maximum potential increase in the money supply given the banks’ reserve position?
B) If the Fed now purchases $500 worth of government bonds from private bond dealers, what are excess reserves of the banking systems? Assume that the bond dealers deposit the $500 in demand deposits. How much can the banking system increase the money supply given the new reserve position?
3. Briefly describe the process of setting the federal budget in the United States. What is the time lag between the start of the process and the point at which the money is actually spent?
Is there anyone somebody that can assist/help me understand this problem?
1.Describe three ways in which the Federal Reserve can change the money supply.
2.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?
3.If the Federal Reserve is going to adjust all of these tools during an economic recession, what changes would they make?
4.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.
1. State the three ways in which the Federal Reserve can change the money supply and explain clearly how each approach is expected to work in changing money supply.
1a. Tool 1 and how it works in affecting money supply.
1b. Tool 2 and how it works in affecting money supply.
1c. Tool 3 and how it works in affecting money supply.
Parts 2 and 3 in table
Tool 2.Proposed change by Fed when economy growing too quickly 3. Proposed change by Fed in economic recession
4A What is the current condition of these tools (in our present day economy (cite sources of information)?
4B What changes, if any, would you make at the next meeting of the Federal Reserve?
4C. Explain why you would make the changes (or not make any) as stated in 4B and the benefits/drawbacks of this strategy.
In reference to “monetary policy,”
1. Please describe the monetary system of the United States including how it is flexible in relation to economic conditions, and how the US Federal Reserve System changes the supply of money.
2. How does the supply of money impact the economy?
These are topics that are touched on in my two textbooks, but the text material on monetary policy is not easily identified under any particular heading in either of the texts. (One of my textbooks is required for my macroeconomics class, and the other was one that I picked up on for additional information).
Article Report on THE IMPORTANCE OF MONETARY POLICY.
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 recession? Or, is the Federal Reserve more concerned about other issues? If so, what are they?
3) What is the stated direction of recent monetary policy? What policy actions have the Federal Reserve taken recently to confirm that direction?
b. To answer these questions, go to the Federal Reserve Web site at: http//www.federalreserve.gov. Locate the section for
Testimony and Speeches, and the section for Monetary Policy Report to the Congress. Read the most recent report.
Please explain each questions in detail and include and charts or graphs as needed.
Monetary policy is defined and exemplified.
The Federal Open Market Committee (FOMC) of the Federal Reserve Board meets every six weeks to set monetary policy in the United States. Immediately after the meeting, the FOMC issues a â??statementâ? that consists of a few paragraphs summarizing its position. Then, three weeks later, the FOMC releases the â??minutesâ? of its meeting. These minutes contain extensive detail about the issues that were discussed in the meeting.
Suppose your job is to explain Federal Reserve policy to the CEO of a corporation. Go to the following web page and read the minutes from the FOMCâ??s meeting on August 10 (which was released on August 31). Then answer the questions below.
a. What action did the FOMC take, if any, regarding the level of the fed funds rate? Why did it make this choice?
b. Pick a paragraph or two from the FOMC minutes and quote it in your answer (so I know which paragraph youâ??ve chosen). Using the Short-Run Model, explain the economic consequences of the events in the paragraph(s) youâ??ve quoted. You do not need to analyze anything else in the economy; just focus on what youâ??ve chosen.
c. Pick one other thing that is mentioned in the minutes that you do not understand (for example, a term you are unfamiliar with). Do some research to discover its economic significance, and explain it in two or three sentences.
In order to make better decisions in life, how does monetary policy effect the interest rates on debt (like credit cards), investments such as stocks and mutual funds, and mortgage rates.
Below are events that might affect the supply of money, the demand for money, and/or the interest rate. Explain how each event may affect these three economic variables. Use graphs if appropriate.
1.The Fed buys securities in the open market.
2.The reserve requirement is increased.
3.Consumers decide to save and reduce their spending on consumer goods.
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