Question

Here is what I require you to do.

1. you must find 1 article(they can be from regular newspaper, magazine, internet, or trade publication)

2. You must

 a. write a summary of what you have read b. relate what you have read to what we have discussed in this unit- make sure to IDENTIFY THE ECONOMIC CONCEPT

c. give me your opinion about what you have read

 

3.submission must be typed as a word document file  and must be a minimum of a page long double spaced

 

4. Make sure you tell me where you got the article from.

Answer 1

Source of the article: federalreservehistory.org (Internet)

The article is about how monetary and fiscal policies are important for the economy.

Summary and opinions

The purpose of this article is to mark all the elements and functions of Government’s monetary and fiscal policies. Monetary policy is the one which is associated with controlling money supply in the economy. This is generally carries out by Reserve Banks. Fiscal policy is the one associated with the income and expenses of the government. It concerns the taxes and taxes revenues. The both policies are of great importance to an economy. The growth is generated or redirected with these policies in any country. Under monetary policy, Fed uses open market operations to control the money supply in the economy. Other than that, Fed sets the discount rates and reserve ratio requirements for banks in order to control the money supply in the economy. This also have an impact on the country’s inflation. According to Dr. Robert, Fed when used the monetary policy at the time of great depression, it impacted the economy greatly. Under fiscal policy, the policies that are used by the government are changing spending policies as well as changing income policies. Changing income policies implies here increasing tax rates in order to increase tax revenue. Sometimes, government end up caught in fiscal deficit. This happens when there is more government spending than revenue. It influences the business activity in an economy.

Perhaps, it is said by the author that both policies can have counter effects also but when focused on the positive side, they get along really good from the economy’s point of view. They stimulate the growth in GDP in an economy when in need.