Describe the 4 main tools of monetary policy that the Fed
uses.
Describe the Fed’s main goals (in terms of monetary
policy)
Explain and show how the money market (supply and demand for
money) is used to find the equilibrium interest rate and how it is
affected by changes in the money supply. Show the
diagram and explain the slope of money demand and illustrate what
happens when the Fed increases or decreases the money supply.
Critically and briefly describe the following conventional
monetary policy tools and policy target and their relative
effectiveness in controlling business cycle fluctuations such as
state of recession and/or state of inflation. How do they operate
during recession and inflation? Draw AD-AS diagram of
macroeconomics model to illustrate your explanation in words.
Reserve Requirements
Discount Rate
Open Market Operations
Federal Fund Rate (Policy target)
Distinguish between budget deficit and public debt with an
example from actual data from the US government...
Every country has THREE (3) main macroeconomic policies, namely
monetary policy, fiscal policy and supply side policy. 4.1 Using a
country of your choice critically evaluate how the THREE (3) main
policies can be used to achieve low unemployment. Motivate your
solution with practical examples 4.2 Discuss the various
type(s) of unemployment and substantiate which type of unemployment
is being experienced to a larger extent in your country.
Explain two of the Fed's main tools of monetary policy and how
each is used to change the money supply if the Fed wants to do
expansionary monetary policy.
Investopedia defines, “Monetary policy and fiscal policy refer
to the two most widely recognized "tools" used to influence a
nation's economic activity. Monetary policy is primarily concerned
with the management of interest rates and the total supply of money
in circulation and is generally carried out by central banks such
as the Federal Reserve. Fiscal policy is the collective term for
the taxing and spending actions of governments. In the United
States, the national fiscal policy is determined by the...