Start Discovering Solved Questions and Your Course Assignments
TextBooks Included
Active Tutors
Asked Questions
Answered Questions
Explain what is a depository institution, and what types of depository institutions are found in the United States?
(Federal Reserve System) What are the main powers and responsibilities of the Federal Reserve System?
When the value of money was based on its gold content, new discoveries of gold were frequently followed by periods of inflation. Explain.
Most economists believe that the better fiat money serves as a store of value, the more acceptable it is. How could people lose faith in money?
How does reserve ratio affect the simple money multiplier, assuming that excess reserves are held to zero and there are no currency leakages?
Using the simple money multiplier, calculate the total change in the money supply resulting from the $1,000 initial deposit.
(The Fed Is a Money Machine) Why is the Fed both literally and figuratively a money machine? (Federal Funds Market) What is the federal funds market?
What is the difference between the federal funds rate and the discount rate? What is the ultimate impact on money supply of an increase in the discount rate?
What three tools can the Fed use to change the money supply? Which tool is used most frequently? What are three limitations on the money expansion process?
Often it is claimed that banks create money by making loans. How can commercial banks create money?
Explain why a reduction in the required reserve ratio cannot, at least initially, increase total reserves in the banking system.
Explain the differences among checkable deposits, savings deposits, and time deposits.
The quantity theory states that the impact of money on nominal GDP can be determined without detail about the AD curve. Discuss the reasoning behind this claim.
Look at the minutes of the most recent meeting to determine what kinds of open-market operations are going on now.
Take a look at the current edition and see whether you can determine what effect electronic banking is having on the Fed's ability to control U.S. money supply.
Look at some of its press releases to determine how this bank has been influenced by Federal Reserve regulations and monetary policy operations.
What impact does the liquidity of this market have on the ability of the Federal Reserve to exert monetary control?
(Monetary Policy) What is the impact of a decrease in the required reserve ratio on aggregate demand?
Analyze why has the Federal Reserve chosen to focus on the federal funds rate rather than some other interest rate as a tool of monetary policy?
(Equation of Exchange) Using the equation of exchange, explain why fiscal policy alone cannot increase nominal GDP if the velocity of money is constant.
What factors have led to changes in the velocity of M1 and M2 over the past 25 years?
What did this assumption imply about the self-correcting tendencies in an economy in recession?
Analyze how the steepness of the short-run aggregate supply curve affects the government's ability to use fiscal policy to change real GDP.
In the diagram use aggregate demand and short-run and long-run aggregate supply curves. Then illustrate the effects of an adverse supply shock.
Illustrate the effect of an increase in long-run aggregate supply. Then illustrate the effect of a decrease in long-run aggregate supply.