Essays on Expansionary Monetary Policy

Article review

Article review

Introduction

Government interference play huge role in the economic processes: by conducting monetary or fiscal policy, policymakers are able to stimulate the economy during the periods of downturn and moderate too fast growth during the periods of economic boom: both these cases have devastating consequences for the general growth and development. Particularly, central banks, that make decisions regarding the monetary policy, are most important players. By using different tools, such as interest rates, open market operations, required reserves etc., central banks might influence on aggregate supply and aggregate demand, thus shifting equilibrium to the desired level (in other ...

What is a cartel? (5 marks)

The companies in a market might collude to set the prices by making explicit or implicit agreements between them on the market price, sharing the market geographically, or controlling the quantity supplied in the market. The agreement between the companies in a specific market might create an oligopoly behaving like a monopoly. The companies might set the price, and all the agreement partners might obey the agreement. If the companies can create a large market power, they might behave like one monopolist. Cartel is the situation of existence of an explicit or implicit agreement between the companies in a ...

Introduction

In 2008, the entire world was rocked by the biggest financial crisis since the Great Depression. The crisis first affected the entire financial system of the United States before then quickly spread globally. The casualties of the crisis included the whole investment banking industry of the US. Other casualties were the US largest insurance company, largest mortgage lender, among other firms in the financial services sector. The US auto industry was severely hit leading to loss of jobs. The US unemployment rate increased by 4.9% points from the third quarter of 2007 to the third quarter of 2009. The ...