regulating the money supply by the Federal Reserve Board of Governors‚ currently headed by Alan Greenspan. One of the main responsibilities of the Federal Reserve System is to regulate the money supply so as to keep production‚ prices‚ and employment stable. The "Fed" has three tools to manipulate the money supply. They are the reserve requirement‚ open market operations‚ and the discount rate. The most powerful tool available is the reserve requirement. The reserve requirement is the percentage of
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briefly describe supply and demand for reserves in the economy to provide some context to the discount window before discussing the implementation of the discount window during the financial crisis of 2007-8 and its overall importance making specific reference to the Federal Reserve and its effect on the interbank lending rate. Firstly‚ I will outline the market for reserves within the banking sector. Demand for reserves has a downward slope because as the federal funds rate‚ also known as the interbank
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Macroeconomic variables 3 A. GDP 3 B. Unemployment 7 C. Inflation 11 D. Exports and Imports 13 II. Government efforts to overcome the crisis 13 A. Government bailout 13 B. Government stimulus package 14 IV. Federal reserve 15 A. Interest rates 15 V. Conclusion 18 Financial Crisis and Its Causes: Several debates have been raised concerning the causes of the recent financial crisis. Analysts and policy makers alike have come up with different theorems that seek
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their choice of instruments‚ and their means of setting their interest rates. The analysis reveals that there are immense differences between the two countries resulting from the nature and degree of influence from their respective domestic political systems. The paper concludes that China has a complex political economy that represents a hybrid of private ownership and state control. Therefore unlike the USA‚ its monetary policies are subject to political influence. Keywords: Monetary policy; Monetary
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banks and other types of financial institutions such as credit unions and savings banks. Any accounts in financial institutions from which you can easily transmit debit-card and check payments without many restrictions Fiduciary monetary system- a system in which money is issued by the government and its value is based uniquely on public faith that the currency represents command over goods and services and will be accepted as payment for debts Money supply- the amount of money in circulation
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Expansionary Economic Policy David Gors ECO203: Principles of Macroeconomics Nick Bergan April 14‚ 2013 In economic terms‚ a recession is defined as a general slowdown in economic activity. In an effort to move the economy out of a recession‚ the government would implement expansionary economic policies. One action the government would take would include conducting expansionary fiscal policy. The other action taken would be conducting expansionary monetary policy. Both of these actions would
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James Garvin Date: 3/22/2014 In the last five years‚ the Federal Reserve has adopted a huge monetary system of decreasing and minimizing the pressure of the interest rate to assist and unsure the hesitant economy and the financial market. The Federal Reserve has by all means put in every strategy to eliminate the impending or disaster that will maintain the cause of recession at the very lowest point of happening. The Federal Reserve has control this situation successfully. As we all know the
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services Computer systems design and related services IT-Using Industries Construction Machinery Motor vehicles bodies and trailers and parts Other transportation equipment Miscellaneous manufacturing Printing and related support activities Wholesale Trade Retail Trade Air transportation Water transportation Truck transportation Transit and ground passenger transportation Pipeline transportation Other transportation and support activities Broadcasting and telecommunications Federal Reserve banks credit
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Monetary Policy and the Financial Crisis of 2007-2008 Stephen G. Cecchetti* Revised 3 April 2008 *This essay was written while the author was the Barbara and Richard M. Rosenberg Professor of Global Finance‚ Brandeis International Business School; and a Research Associate‚ National Bureau of Economic Research. Note that as this draft was written‚ events were continuing to unfold. Hopefully‚ what I have written in February and March 2008 remains accurate. Among the vast number of people I spoke
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central bank‚ and borrowers. d. banks‚ depositors‚ the central bank‚ and the U.S. Treasury. Correct Marks for this submission: 1/1. Question 2 Marks: 1 If a bank has excess reserves of $10‚000 and demand deposit liabilities of $80‚000‚ and if the reserve requirement is 20 percent‚ then the bank has actual reserves of Choose one answer. a. $16‚000. b. $20‚000. c. $36‚000. d. $26‚000. Correct Marks for this submission: 1/1. Question 3 Marks: 1 Because of the adverse selection
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