S. economy. Acting as the Chairman of the Federal Reserve‚ you are charged with directing the nation’s economy for ten years. There are three economic indicators that are monitored to evaluate the economy. These indicators are the Real Gross Domestic Product (GDP)‚ the Inflation Rate and the Unemployment Rate. The tools that are at your disposal include the ability to adjust the Federal Funds Rate (FFR)‚ the Discount Rate (DR) and the Required Reserve Ratio (RRR). In addition‚ you have control
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Colander. The state of the economy‚ concerns of the Federal Reserve‚ and the stated direction of recent monetary policy will also be discussed. "Monetary policy is a policy of influencing the economy through changes in the banking system’s reserves that influence the money supply and credit availability in the economy" (Colander‚ 2004‚ p. 659). Monetary policy also refers to the actions undertaken by a central bank‚ such as the Federal Reserve‚ to influence the availability and cost of money and
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and checkable deposits‚ the level of time deposits and excess reserves‚ and the level of total reserves and required reserves. Use the model of money supply determination discussed in class. Show your work. Multiple Choice Questions (50 points) Use a scantron. 1) As of 2006‚ about how many banks were there in the United States? 1) _______ A) 7500 B) 57 C) 2000 D) 14‚000 2) The United States has a dual banking system in the sense that 2) _______ A) the public may deposit
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term quantitative easing (QE) describes a process in which the Federal Reserve expands its balance sheet through purchasing back government bonds from financial institutions with electronically created funds. The government purchases‚ by way of account deposits‚ give banks the excess reserves required for them to create new money by the process of deposit multiplication from increased lending in the fractional reserve banking system. As the supply of medium and long-term government bonds decreases
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Running head: MONETARY POLICY/MACROECONOMIC IMPACT PAPER Monetary Policy/Macroeconomic Impact Paper Heather Robinson University of Phoenix MMPBL 501 04/25/2010 Introduction The Federal Reserve Board (FED) utilizes tools to control or manipulate the money supply‚ these tools affect macroeconomic factors such as inflation‚ unemployment and interest rates‚ which ultimately determine a country’s GDP. To recommend the best monetary policy combination I will discuss the tools used by
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2. Could each of the following items potentially serve as money? Consider each as (1) a medium of exchange‚ (2) a unit of account‚ and (3) a store of value. a. Visa credit card It is not money because it fails the store of value test. b. Federal Reserve note Yes it can serve as money. c. Dog No‚ it cannot be used. d. Beer mug No‚ it cannot be used. 4. What backs the US dollar? Include the distinction between commodity money and fiat money in your answer. Commodity money is anything
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paying for goods with goldsmiths ’ receipts‚ which would serve as the first kind of paper money" (Brue and McConnell‚ 2004‚ p.253). This system reflects the infant stages of banking. The vaults housing the gold grew substantially with the general public ’s acceptance of the gold-receipt exchange process. The goldsmith ’s ensured a "100 percent reserve system" allowing full access to gold on demand based on receipt amount (Brue and McConnell‚ 2004‚ p.253).
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2 Copyright © 2010 Pearson Education‚ Inc. Publishing as Prentice Hall Measures of the U.S. Money Supply MEASURE DESCRIPTION VALUE (JAN 2008) SEAS. ADJ. (BIL. $) Coins held outside the Treasury‚ the Federal Reserve banks‚ and depository institutions‚ as well as paper money—Federal Reserve notes 758.0 Checkable deposits Deposits in checking accounts (demand deposits) 292.5 Travelers’ checks Checks that can be used as cash issued by nondepository institutions such as American Express Other
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The Federal Reserve System (also known as the Fed) is a government organization that encompasses several private U.S. banks. The Federal Reserve System is our central banking system. It is composed of the Federal Reserve Board of Governors‚ Federal Open Market Committee‚ 12 Regional Federal Reserve Banks‚ private banks and various advisory boards from different market sectors. Some key objectives performed by the Federal Reserve System are maintaining maximum employment‚ provide stability of financial
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Economics Student ID: B10016191 Name: Lee Sun Seok 李淳碩 (Tim) Q1. How does the government use the fiscal policy and monetary policy to stabilize the economy? ◆ According to the basic Keynesian model inadequate spending is an important cause of recessions. To fight recessions- at least‚ those caused by insufficient demand rather than slow growth of potential output- policymakers must find ways to stimulate planned spending. Policies that are used to affect planned aggregate expenditure
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