Essays on Monetary Policy

The game simulation requires the specific knowledge of macroeconomic concepts. It shows how the decisions made by Chairman of Federal Reserve System affect the general well-being of the economy. The game clearly displays the process of monetary policy and how inflation and unemployment are interconnected between each other, i.e. policies that aim at curbing unemployment may result in high inflation. Given that there is always a trade-off between inflation and unemployment. The task of Chairman is to keep both inflation and unemployment at normal rate, which is complicated by the fact that all economic conditions and events occur at the ...

THE UNITED STATES FEDERAL RESERVE SYSTEM

The Federal Reserve is the central bank of the United States of America (Federal Reserve System, 2013). It is governed by a board of directors appointed by the president, whose main responsibility is the determination of the monetary policy through the manipulation of the various monetary tools (Federal Reserve Board, 2013). The bank was originally formed in December 23rd 1913 by an act of congress and is currently headquartered in Washington D.C, with twelve other branches located in major cities across the country (Federal Reserve System, 2013).

One of the monetary tools that are used in setting the monetary ...

Introduction

This is a strategy adopted by the government through the Central Bank to control macroeconomic shocks due to fluctuation in wages and prices of goods and services. Stabilization may include monitoring the business cycle and interest rate regulation by the central banks. Moderation of these factors leads to changes in unemployment rate, recovery of an economy from economic shock control borrowing and money supply. In general terms stabilization are used to regulate the fluctuation of business cycle. There are two main elements of stabilization policies, that is, monetary and fiscal policies.

Elements of Stabilization Policies

Monetary policy This is the process through which ...

- When a country such as the United States is experiencing serve and prolonged recessionary trend discount rate, term auction, and open market facility can provide useful means of ensuring that the economy returns in the right course. Discount rate is the interest rate that the central bank charges commercial banks and other depository institutions when they receive money from the Federal Reserve Bank's lending facility. During periods of prolonged recessionary trend, the Federal Reserve System should reduce the discount rate in order to encourage commercial banks and other financial institutions to lower the interest rate they charge to ...

Every nation has independence to choose, which exchange rate system it will follow. The choice for selecting a suitable exchange rate ranges from a flexible exchange rate or fixed exchange rate system. Under floating exchange rate system, the value of the currency is decided by market forces, while, under fixed exchange rate systems, the currency of the country is pegged against some standard of value. The choice of exchange rate is a tough task and depends significantly on the freedom of capital to flow in and out of the country. However, one negative effect of allowing the free capital flows is that ...

Question 1

The federal reserve bank is a major institution in the American’s economy and society designed to offer financial stability by maintaining currency flexibility. The Fed as consistently played a significant role in the Untied States economy and monetary policy since its establishment. The Fed established in 1913, therefore, its the roles and regulations go back only to the early years of the 20th century. For instance, the Fed came into play when a harsh economic crisis started in 2008. During this period the GDP shrank, unemployment increased and millions of Americans were worried about their futures. It was the role of ...

In recent times, economic volatility in asset prices has become the norm rather than an exception. While the reasons for this are varied including better data access to monetary and political changes, fast flow of information globally and better money flow system for the global investor, we seek to explore the effects of monetary policy on asset prices (stocks, currencies and commodities). We refer to the article written by Weber. From past experience of monetary policy changes and corresponding data (Magnus 123), I would certainly agree with the basic fact that monetary policy brings economic volatility. As far ...

Introduction

The series of recessions that have occurred in the past decades have raised several questions about the effectiveness of the various existing measures of recession, some of which use a comprehensive set of indicators. A number of analysts have stressed that financial market indicators provide a more effective predictions about recession. In this respect the predictive capacity of the bond yield curve have received much attention in recent times. The current discussion sheds some light on the predictive capacity of the yield curve and the associated term spread. Current scenario is studied in terms of the yield curve obtained from present ...

Introduction

The actions taken by the Reserve Bank of Australia to influence the cost and supply of money in the economy are referred to as the monetary policy. The main tools through which the monetary policy influences the market operations is the interest rate that is paid on the loans from the money market. Manipulating the interest rate is the main tool of RBA to influence its monetary policy. RBA is the central bank of Australia; and it is the role of the central bank to ensure price stability by controlling the supply of money. So, a stabilizing role is played ...

Introduction

In general, markets do not adjust automatically to bring about equilibrium. Thus, historically, many economists, including John Keynes, recommended the need for government intervention. In his book, ‘ The General Theory of Employment, Interest and Money’, Maynard Keynes asserts that the government should intervene actively in order to manage the level of aggregate demand in an economy so as to bring about desired level of employment and output. His argument is attributed to the fact that wages are rigid and, thus, may not fall enough to clear the market and solve the unemployment problem. Broadly, the government can intervene in ...

[Author’s Name] [Institution’s Name] The prevalence of interest rates could e extremely important for a county from different standpoints and it is more than important for the countries to have a specific amount and trend of interest rate prevalence in total. There are number questions which have been asked in this particular report in total.

Chapter-2: Fed Watching

- Fed Monetary Policy Change In the United States of America (USA), Fed held responsible for changing and maintaining the prevailing interest rate in a country. The question regarding changing the monetary policy of the country reveals that there are certain things ...

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Abstract

Recession in economy (particularly in macroeconomics) - This term refers to a relatively mild, non-critical production decline or slowdown in economic growth. The decline in production is characterized by zero growth in gross national product (GNP) (stagnation), or a decline for more than half a year.

The recession is a phases of the economic cycle (conditions) that follows the boom and is replaced by depression.

A recession often leads to a massive drop in the index on the stock exchange. As a rule, the economy of a country depends on the economies of other countries, so the economic downturn in a particular country may lead to a slowdown in the economies of other countries, and even to the collapse ...

In 2008 the world, and the U.S. in particular, were hit by what is referred to as the worst financial crisis since the Global Depression. Unusually severe crisis provoked unusually aggressive response from the Federal Reserve, and their actions still remain the topic of numerous debates – some argue that the response neglected long-term consequences focusing only on stabilizing the situation in the short perspective (Meltzer, 2012), while the others point out that had the government not intervened, 2010 GDP would have been 11,5% lower and number of people employed would been lower by 8,5 million (Blinder & Zandi, ...

Abstract

The Federal Reserve release report, previously known as Humphrey-Hawkins report, is based on the economy and the direction of monetary policy. This report gets released twice a year before the congress. In this document we will focus on whether this report is influenced more by inflation or by the possibility of an impending recession. This document also discusses the monetary policy and its direction as stated in this report.Introduction The Federal Reserve Banking system also considered as the ‘lender of last resort’ provides support to major financial institutions whenever they are in dire situations or when the market is ...

Introduction. 3

Expansionary monetary policy.3 Contractionary monetary policy3 Australian monetary policy3 Objectives of Australian monetary policy.4 Australian Monetary policy framework4 The decision process in monetary policy...5

Monetary policy implementation in Australia5

Transmission of Monetary policy to Australian economy.6 Conclusion .7 Introduction The monetary policy is a policy that is used by the monetary authority of a given country to control the money supply in the economy. This policy frequently targets a certain interest rate with an objective of promoting economic stability and growth in an economy. The official goals normally include relatively low unemployment and stable prices. This policy can either ...

Monetary policy refers to actions of the government, through the country’s monetary authority, to regulate the economy by influencing the supply of money and credit, and the prevailing interest rates. The Federal Reserve is the monetary authority of the U.S.A. Therefore, it is in charge of formulation and implementation of monetary policy in the U.S.A. Monetary policy seeks to achieve the five macroeconomics goals; full employment, economic growth, favourable balance of payment, price stability and income redistribution. In the U.S.A, monetary policy has been effective in regulating the economy and in pursuit of the chief macro-economic goals of ...

In any economy, several tools can be used to control the amount of money in circulation. The most common tools of controlling money in circulation in any economy are in form of policies like monetary and fiscal policies. Monetary policy addresses the issue of money supplied in the economy by either expansionary or contractionary policies which regulate the amount of money in circulation (Michael 2008.). Since money can be claimed to be the main factor that dictates employment, inflation and of the economy related issues in a region, its supply has direct impact on the mentioned spheres of the ...

Introduction

International trade refers to exchange of services and goods across countries. Increased globalization has increased cross border trade. The numerous advantages that accrue from international trade have also stimulated growth of international trade. However, there are certain limitations of international trade that has made it necessary or countries to protect their local economies from the adverse effects of international trade. On the other hand, monetary policy refers to decisions that are undertaken by the central bank and the government in order to influence the country’s economy by manipulating credit cost and availability of money. This paper discusses the ...

Introduction

The need for government and central bank intervention in the market has historically received support from a number of scholars. For instance, the economic idea of government intervention (demand-side management) in the market is largely attributed to the Keynesian economics, which is highlighted in the book, “General Theory of Employment, Interest, and Money” by John Maynard Keynes published in 1936. According to the Keynesian economics, automatic market forces (alone) may not trigger a condition of economic equilibrium, particularly during a financial crisis. This is primarily due to the presence of economic inefficiency brought about by market externalities. Closely linked to government intervention ...

Inflation targeting and Interest rate targeting are two primary and most popular monetary policies across the globe today. Inflation targeting can be defined as a central bank policy that revolves around meeting and adhering to preset and publicly displayed targets for the annual rate of inflation (investopedia 2013). The benchmark used for inflation targeting varies from country to country but is some form of price index of a variety of consumer goods. Most commonly this benchmark is Consumer Price Index (CPI). While Interest rate targeting as a monetary policy regulates and checks the interest rate charged by one depository institution on an ...

GDP

In Saudi Arabia Gross Domestic Product (GDP) has expanded to 5.87 percent in the third quarter of last year over the 2011 quarter. Over the years the GDP growth rate have been recording an average of 5.12 percent with the highest growth rate of 27.49 percent in 1974 and the lowest of -11.10 percent in 1982. 55 percent of the GDP is constituted by the petroleum sector.

Unemployment

The rate of unemployment has increased from 5.4o percent in 2009 to5.50 in 2012 as reported by the Central Department of Statistics and Information. Between 1999 and 2012, the rate of unemployment ...

Federal Reserve Paper

Introduction Throughout the 19th century and the start of the 20th century, monetary alarms overwhelmed the nation, dominant to bank deficiency and company downfall that rigorously agitated the economy. The downfall of the nation’s banking structure to adequately supply funding to anxious depository organizations provided considerably to the economy’s susceptibility to monetary alarms. Short range credit is a significant basis of liquidity when a bank senses unanticipated and extensive withdrawals throughout a monetary alarm. A chiefly severe crisis in 1907 provoked Congress to set up the National Monetary Commission, which put onward recommendation to generate a foundation that would help ...

INTRODUCTION

Economies these days face the challenges and combat with the rising inflation continuously. The structure of the macroeconomic policy encourages the economic growth. The tools used for the stability of the economy are in some of the cases referred to as the expansionary economic policy. The fiscal and the monetary decisions of the economy determine the policies which end recession. These policies are usually formed by the central banks which determine the increasing or the decreasing money supply. The expansionary policy is considered as an effective tool for managing the low growth periods which arise in the business cycle. ...

Introduction

There are two kinds of tools available to the economic policy-makers through which they tend to influence the economy of the country; these two tools are fiscal and monetary. The former policy related to the spending of the government and the collection of revenue like altering the disposable income of the people by lowering taxes or increasing the spending so that demand is stimulated. The latter which is the monetary policy is associated with the supply of money and is influenced by such factors like the rate of interest and the reserve requirements for the banks. Usually these policies ...

Introduction:

Monetary policy refers to the strategy undertaken by a country’s monetary authority to control money supply usually by targeting the interest rate to facilitate economic growth and stability. The Australian government charges the Reserve Bank of Australia with the responsibility of maintaining sustainable economic growth, high employment rate and steady prices. In other words, the RBA strives to achieve the goals of full employment and non-inflationary level of total output. To accomplish these objectives, the RBA closely monitors the economy and puts in places policies to either increase or decrease the amount of money circulating in the economy. Consequently, ...

Introduction

The BRIC nations, made up of Brazil, Russia, India and China have been projected to be the world emerging economic powers. These countries account for close to half the world’s population. In recent times, the BRIC nations have contributed to most of the world’s GDP growth. These nations have been regarded as powers to watch as regards to world economic growth. These countries have not only been observed to be emerging economic powers but have also shown signs of gaining control of the world economy. These emerging nations have an advantage over other nations of the world ...

Summary

Monetary policy refers to a means by which monetary authorities of a nation controls the supply of money. Notably, the policy targets rate of interest with an aim of promoting economic stability and growth. U.S monetary policy, perhaps affects the entire decisions people make, either economic or financial. U.S has the largest economy in the world; hence its monetary policy affects financial and economic sectors of other countries. Certainly, the main aim of monetary policy is to control the performance of the economy. It influences the economy by checking countries inflation, employment, and economic output. In U.S, monetary policy is ...

Following the American Psychological Association’s Guidelines

INTRODUCTION Monetary policy implemented by the central banks aims at influencing directly the financial markets to create a stable monetary environment in the economies. The economies fluctuate over time with peaks and troughs. The globalization has created a large world economy which includes the connected country economies, and any crisis emerging in a country spreads to the other countries’ economies quickly. The crisis creates vulnerable economies, and the economy managements of the countries have to intervene to recover from the crisis. The global crises have severe results for economies and individuals, and they also can create disequilibrium in the monetary values ...

1. Monetary Policy

Monetary policy is a strategy related to the flow of money in the economy and its value. It also shows the association between rate of interests in the economy and the total supply of money and exchange rates. It is also a demand side policy which the government can use to accomplish its macroeconomic goals; that is, maintain economic growth, low rate of inflation, low unemployment and stability of payments equilibrium. Moreover, monetary policy is known as accommodative, if the interest rate laid down by the central monetary power is planned to create economic growth; neutral, if it ...

Role of Federal Reserve

In the past few years, the Federal Reserve has come under increased scrutiny due to the financial crisis of 2007 – 2009. It has been criticized for lowering the interest rates, which resulted in cheaper mortgages, and thereby precipitating into a full blown financial crisis. Further, it has also been criticized for transforming itself into an investment vehicle, due to its role in quantitative easing, even though it helped in financial recovery. Historically, it has been Federal Reserve’s dual mandate to maintain the stability of prices and employment. That it does by varying its federal funds target, by ...

Introduction

The monetary policy of Colombia has undergone numerous changes from 1994 to 2014. The primary purpose for doing so is to target inflation and stabilize the financial status of the country. For this object, state agencies and other monitoring authorities had occasionally evaluated the response of such policy in relation to various financial variables. Although there is not any specific and explicit target regarding real or nominal exchange rates and the monetary policy has to rely upon mainly on the variation of short-term exchange rates. Therefore, in an open economy like Colombia, exchange rates are considered as the most ...

Unlike most countries, that use the central Bank system the U.S has a federal Banking system which is also known as the fed. The headquarters of the federal Bank is in the capital Washington D.C and also has other twelve district banks in different locations. Decisions made by the Federal Reserve Bank are critical because they ensure that the country has a safe and sound financial system. Federal Reserve Act established the fed in 1913 and was formed to solve problems of money in the country. Therefore, the Federal Reserve Bank is mandated to formulate the best fiscal and monetary policies ...

The European System of Central Bank (ESCB) is governed by European Central Bank (ECB) and the National Central Banks (NCB) of European Union Member States. European Central Bank is the Central Bank of Europe Zone. ESCB is governed by the governing council and other decision making bodies of ECB. The governing Council is responsible for making monetary decisions and the Executive Board is empowered to implement monetary policy as per the framework of decisions laid by the Governing Council. Just like any other Central Bank, the core function of ECB includes maintain price stability of the local currency in ...

According to the macro-economic theory, there are several policies used to stabilize the economy of a country. The most common policies used to achieve this objective are the fiscal policy and the monetary policy. In economics, fiscal policy is involved in controlling the government expenditure. Applying it in stabilizing the economy of a country, it dictates government expenditure so as to stabilize the economy of the country. The main elements used to stabilize the economy are the government expenditure and revenue generation into the economy through taxation (en.wikipedia.org). Contrasted to the fiscal policy in stabilizing the economy is the monetary policy. ...

Introduction

Monetary policy refers to those policy measures targeted at achieving desired economic outcomes through money market operations. Authorities in charge of money market control use different policy instruments to control the money supply in order to achieve suitable market prices as well as stability in the national economy. The key instruments at disposal for those authorities include open market operations, minimum reserve ratio as well as bank rate. However, the policy instruments application does not have a direct impact on market prices and demand but follows a transition mechanism from the authorities’ actions to the desired economic results. In that respect, ...

Question 1: To what extent is government intervention in the international trade of goods and services between two countries necessary to yield economic welfare? Discuss in the context of any one market with which you are familiar. Since the turn of the century, the developing countries are struggling hard to establish their foothold in the world. These developing nations were once corridors of trade to the Central Asian Market but now they are being swiped off their feet due to the overwhelming response of the capitalist world. It is becoming hard for them to keep pace with the ...

Introduction

Various instruments of macro-economic policy affect a country’s economy and the global economy at large. They include monetary policy, fiscal policy, and the supply side policy. Monetary policy is when the government decides to use the interest rates and the money in the economy to control the economy (Griffiths & Wall, 2012). This can be applied during recession to expand the economy, or during boom to restrict the economy. Fiscal Policy is used to direct the economy by deciding the expenditure of the government, the resources, and the taxation. The supply side policy is used to change the economic ...

Executive Summary

Bank of England acts as a central bank and performs the credit rationing and is also the controller of the monetary policy, so as to ensure that there is no hindrance to the economic stimulus. It cautiously exercise its credit control function. For Instance, at the time of inflation, when the demand for money is high and so is the rate of consumer spending, Bank of England increases the interest rates and also adopt other measures as Open market operations to limit the money supply. This will impact the total availability of funds in the market and will ultimately lead ...

Sequestration and the Government Shutdown of October 2013

Sequestration is a budgetary process in the United States under which limits on the federal budget are imposed. The process of sequestration involves setting a cap on the amount of spending that the government can undertake at any given period of time. The capping of the government spending is not a blanket one and it targets specific categories of expenditure. Budgeting in the federal government of the United States is carried out through a process which involves both the executive and the congress. The executive arm of the government prepares a budgetary estimate of expenditures covering a specific period of time and the congress, ...

Higher Educational Establishment

Introduction Aggregate demand and interest rates, along with the actual economic growth and the prospects are the benchmarks of any Federal government. In order to control the economy, government uses monetary policies to analyze essential measures.

Open Market Operation

Open Market Operations involve purchase and selling of governmental securities which helps to stabilize inflation. The Federal funds rate is equal to the interest and lending rates, according to which financial institutions charge for the loans. The Domestic Open Market Operations are guided by the Federal Open Market Committee and continuing with the aid of strengthening the efforts to support economy recovery ...

Arguably, the Federal Reserve System (Feds) has been in existence since the year 1913. In fact, it is the central bank of the United States. The Fed system was established for various reasons. As a matter of fact, many people in America could not lay their hope in the banking system before Feds was established. This implies that the American could not entrust their money to any banking system, meaning they had totally lost confidence. The establishment of the Federal Reserve System helped in regaining the public trust and confidence in the banking system.

The Americans had lost faith and ...

In case, real GDP is lower than potential GPD expansionary policies are implemented in correcting contraction of business cycle. Expansionary Fiscal policy leads to increases in purchases by government, tax rate decrease and transfer payment increase to overcome contracting business cycle. Expansionary fiscal policy closes gap of recession, stimulates economy and decreases rate of unemployment.

Fiscal policy tools to stimulate economy are:

Government Purchases Expenditures done by government sector for services and final goods come under Government purchases. Government purchases are part of GDP bought by the government. Government purchases include heavy cost expenses like highway construction and aircraft clips carriers to smaller expenses like ...

International Finance Trilemma

After 2007-2012 global economy recessions, many nations are striving to sustain their economy stability in the efforts of meeting the respective governments and citizens’ fundamental needs. Primarily, Trilemma of international finance hold that a country or nation cannot concurrently peg the exchange rate, maintain the independent monetary policy and permit free financial flows cross-borders (Feenstra & Taylor, 2008). International finance Trilemma states that under no given scenario that a country will enjoy steady foreign exchange rates, capital mobility and monetary policy that is independent. Based on international finance Trilemma, the central bank is often tasked to ensure that the economy is stable ...

Executive Summary

Banks such as UK bank get the money that they lend from the deposits. The level of lending is usually dependent on the demand of the funds by the public and on the economic level of the state. When the demand for money is high, UK bank will have to check on the level of money that is circulation before it decides on how much to lend out (Sessa, 2011). It is done to reduce chances of having excess money supply into the economy that may result to the inflation. The bank can use various ways to ensure that ...

Money crisis in UK can be controlled by the Bank of England through changing the interest rate while attempting to alter the level of economic activity. Actions can be taken when the money in circulation increases in fast rate as compared to the output volume produced. This situation can be referred to as inflation. To control this situation, interest rates should be changed. The Bank of England uses monetary policy to increase or decrease the money in the banking system. However, the Bank of England does not print more money to alter money supply as this is against the ...

Sequestration refers to the reduction of budgetary costs by the United States federal government. In 2013, the federal government cut spending in particular categories of expenditure. Primarily, the cuts were on account of the Budget Control Act (2011) that were similarly deferred for some period by the American Taxpayers Relief Act (2012) till March when the law was implemented. According to Demaree, sequestration can be described as the practice of reducing obligatory spending in federal government budget (1). These cuts are occasioned when expenditure for the government surpasses the total income the government receives in one financial year (Sequestration ...

Impact of Macroeconomic Variables on My Business

Abstract I examined in this report the impact that the changes on the different macroeconomic variables e.g., price level, interest rate, and exchange rate have on the economy. Also, an analysis of how fiscal and monetary policies of the Australian government are presented as these policies and variables influence the success or failure of my business, the CadsBerri. Then my analysis dwell on the net value model by Brandenburger and Nalebuff to show that rational strategy could help my business survive despite the uncertainties posed by the macroeconomic environment.

Introduction

My business is on manufacturing and exporting of good ...

Arguably, 2000-2009 was the most difficult moment in the world economy. The financial crisis that took place in United States and the world became the worst financial munch to ever occur in the world. The financial crisis took place in the late 2008 at a remarkably speed, whereby most economic factors were fully disturbed. Mortgage-related securities, which had fully spread in United States as well as global financial systems collapsed. As a matter of fact, this crisis undermined several largest and renowned financial institutions in United states and the world. Additionally, the crisis damaged stronger economies and financial systems in the ...

Introduction

In the United States, the Federal Reserve System is charged with regulating the country’s monetary policy. The system was implemented after leaders noted the deficiencies in the previous national banking system. The previous system had a currency that was inelastic and there were liquidity problems in the economy. There were a lot of financial panics in the economy caused by the inefficiencies in the system. A republican representative proposed the creation of a centralised banking system that would operate with a minimum level of government involvement. The Federal Reserve System was instituted in 1913. The system was able to solve three ...

NAMEINSTITUTION

Introduction Monetary policy is a vital tool for the Government to mend economic problems in a country. Economic theory can be applied into monetary policy to know which move policy makers can do to meet their desired economic measures. For example, in economic theory, reducing the money supply will lower aggregate demand, because people will have lesser purchasing power. This will also lead to other economic fluctuations because of the decrease in aggregate demand. A very good example is the money contraction France did in 1724. By collecting ideas from Francois Velde (2009) on his analysis on the events that ...

1.0 Introduction `According to Barbone et al. (2009) all members States of the European Union are also members of the Economic and monetary Union (EMU). Barbone et al. (2009) further states that the member states coordinate their policy-making in support for the economic objectives of the European Union (EU). Nonetheless, there are some member states that have gone further to adopting a single currency (Euro) (Barbone et al., 2009). They are the member states that comprise of the Euro area. Euro, according to Bekaert (2010) is a single currency that has been adopted by 19 European states that make up ...

Related Learning Experience

Although it may not seem likely, I have been able learn a great deal about important microeconomic concepts and topic throughout my professional career. Importantly, this was not always the cause as it was not until I entered the field of finance and consumer credit that I began to learn about, and understand important elements of macroeconomics, as well as the role and influence they had with the national and global economy. Perhaps the most profound professional experiential education came during the recent global financial crisis and economic downturn that began in late 2007 and lasted until nearly 2011. Following ...

Executive summary

Any sales system required to be used in any sales department or organization needs to meet user specification requirements. It has to be user friendly and an interactive user interface. These are some of the main requirements that any sales system software ought to meet. Redundancy in the system should also be reduced to avoid repetition and bulkiness. These new system should have an auto update in information that are linked together or that bear same data. In essence, the information in one section of the system should not differ from the other sections that are expected to be ...

ABSTRACT

Federal Reserve Bank, commonly known as FED, has been established with the aim of stabilizing the overall financial system within the US economy. FED has been using different tools and methods like open market operations, moral suasion, discount rate, and the reserve requirements in order to achieve the overall economic goals. These economic goals include; reducing unemployment and inflation, and accelerating the process of economic growth. In order to overcome the today’s economic challenges, the chairman of Fed should work on controlling the monetary measures and pulling strategies which benefit the global economic growth.

INTRODUCTION

Money market is a place ...

ANALYSIS OF CHINA'S ECONOMY

ABSTRACT China still being a developing nation has witnessed quite difficulties in managing the economy. Due to the constantly rising challenges including high level of inequality, rapid urbanization along with demographic pressure related to aging of population and migration of labor, China has lost its competitiveness in the international market. Even though, China has become the world’s largest exporter of goods and services, it still faces difficulties in managing the troublesome economy of the nation. The high level of trade deficit along with high credit requirements of both public and private sector has reduced the economy of ...

Monetary policies are interference in the economy by the central bank of a country with an aim of influencing economic activities. Intervention by the central banks can be through interest rates, regulation of the banks and open market operations. These actions could be aimed at reducing or increasing money supply in the economy (Gitman, 2009). Fiscal policy is manipulation of government expenditure to achieve certain objectives. Fiscal policies include public adjustment of taxes, reducing or increasing government expenditure. Preparation of deficit or surplus budgets is fiscal policies that can be implemented to achieve certain objectives (Zoli, 2005). Open ...

Economics of Global Money Markets

When money became a commodity, money market became part of the financial markets for the reasons that assets that are involved in short-term buying, borrowing, selling and lending with the original maturities of about one year or less. The trade in money markets is carried out over the counter and as such it is wholesale. There are various instruments that exist and they include deposits, treasury bills, bankers’ acceptances, certificates of deposit, bills of exchange, commercial paper, federal funds, repurchase agreements and asset backed securities. This provides a funding that is liquid for the global financial system. Capital markets and money ...

Slide 1:

The monetary policy actions by the Bank of England determines the amount the bank will charge as interest when it lends to other banks. This interest rate is vital in determining the rates at which banks will lend to their customers such as businesses and institutions.

If the bank of England charges higher rates of interest to banks, this obviously increases the costs of these loans and in retrospect, the banks must raise their lending rates to customers. Higher lending rates means few customers will be willing to borrow from banks and may switch to other lending institutions ...

Abstract 2

Mixed economy system and the allocation of resources 2 Whitbread and Burberry in the mixed market system 3 Fiscal and monetary policy 4 Fiscal and monetary policy impact on Whitbread and Burberry 4 A competitive environment 5 Benefits of fiscal and monetary policies for local brands in the UK 6 Conclusion 6

Works Cited 7

Abstract The research will look at how government intervenes in a mixed market system so that there is proper allocation of resources among people. The intervention from government is required so that the resources are utilized efficiently rather than only on ...

IS-LM model also known as the Investment Saving-Liquidity Preference Money supply model is a macroeconomic tool that shows the interrelationship between interest rates and the actual output, in the money market as well as the goods and services market. The point at which the IS and LM curves intersect is known as the general equilibrium. This is an extremely fundamental tool and has been used by different economists in a bid to explain the various macroeconomic concepts that define how activities flow in the goods and services market and monetary market. As a critical tool among monetarists and Keynesians the IS-LM model ...