Federal reserve chairman game Using the concepts you’ve been studying‚ describe how the game shows the use of monetary policy? Based on the monetary policy‚ the authority controls the supply of money through targeting the interest rate to promote economic growth and stability. Having relatively low price level and less unemployment rate are the main goals. Therefore‚ this game also adjusts the federal interest rate in order to retain the lowest unemployment rate and improving the economic
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1) Which of the following would be a useful way to increase the saving rate? A) Tax breaks to increase the real return that savers receive B) Increasing taxes if Ricardian equivalence holds C) Increasing government spending D) Increasing taxes on capital goods Answer: A 2) Assume that the full-employment level of output is $5000 billion and the natural unemployment rate is 5%. Suppose the current unemployment rate is 8%. What would be the current level of output according to Okun’s law (when
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Explain the aggregate supply in the short run. In the short-run‚ the aggregate supply curve is upward sloping. There are two main reasons why the quantity supplied increases as the price rises: 1. In the short-run‚ the nominal wage rate is fixed. As a result‚ an increasing price indicates higher profits that justify the expansion of output. 2. An alternate model explains that the AS curve increases because some nominal input prices are fixed in the short-run and as output rises‚ more production
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countries to begin to adopt similar capital controls to help their economies effected by the Great Depression as well. After most developed countries began to move away from the Gold Standard and began looking for a way that they could have monetary policy autonomy‚ the Bretton Woods system came into play. This system looked to have foreign currencies tied to the US dollar and “if a country’s currency was too high relative to the dollar‚ its central bank would sell its currency in exchange for dollars
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Seventeen different member states have combined and collaborated to form a single economic and monetary union (EMU)‚ called the Euro zone. The Euro zone has been formed in order to align and develop the same monetary and fiscal policies for a set of countries to provide them with some benefits. The union was initiated first in the year 1999 with eleven countries and has grown to seventeen countries now. Though it all looks crème and fancy from the outside‚ there are actually several advantages and
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which is contributes to the economic policy as well as political policy. S b c d e f g w se f s f s f s f s f s f s f s f s f s f s f s f s The currency board system was first introduced in the British colony of Mauritius in the year of 1849 and Hong Kong introduced this system in 1983. The currency board system comprises the currency board‚ commercial banks‚ and other financial institutions. It differs from the central bank. A central bank is a monetary authority that has discretionary monopoly
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Fiscal policy is an attempt to manipulate government expenditure and taxation so as to affect aggregate demand and aggregate supply to achieve full employment and price stability. Monetary policy is a policy that affects money growth (Langdana‚ F. K. 2009‚ pg 34). Therefore when the government uses monetary policy‚ the money
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Caribbean business environment. Name: reco holder ID#:19930228-0038-2011 Tutor: Natalie Walthrust-Jones Date: 19th MARCH 2013 The Bretton Woods system is a landmark system for monetary and exchange rate management established in 1944. The Bretton Woods Agreement was developed at the United Nations Monetary and Financial Conference held in Bretton Woods‚ New Hampshire‚ from July 1 to July 22‚ 1944. Even as World War II raged on‚ 730 delegates from the 44 Allied nations attended the conference
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Contents Page LIST OF ILLUSTRATIONS ABSTRACT INTRODUCTION 1. Background 2. Problem 3. Purpose DISCUSSION 1. Monetary Policy Open Market Operation Reserve Requirement 2. Fiscal Policy Reduce the level of government purchases Increase taxes Transfer Payments CONCLUSION RECOMMENDATIONS REFERENCES List of Illustration Figure 1: Malaysia
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starting 11th March 2013) 1) Please say whether the following statements are true or false: a. The main functions of money are the medium of exchange‚ store of value and unit of account. b. The monetary base is cash in circulation plus bank deposits. c. Money supply is monetary base plus bank deposits. d. When the Central Bank acts as a lender of last resort‚ it is making sure that banks have the money they need to continue to operate. e. The discount rate allows the Central
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