The monetary system in any economy facilitates trade and allows people to trade more efficiently, as compared to a barter economy. In the United States, the monetary authority is the Federal Reserve System (also referred to as the Federal Reserve, or informally, as the "Fed".)

For this assignment, use the information presented in the textbook and the Fed's website when addressing the questions below.

1. What are the requirements for something to be considered money? Why does the dollar have value?

2. What does the money supply consist of and what are the respective amounts in the total money supply for the United States?

3. What are the primary functions of the Fed? What role does the Federal Open Market Committee (FOMC) play in our economy?

4. What role do the financial institutions (commercial banks and other institutions) play in our financial system?

5. What is meant by the term "fractional-reserve banking" in our system? What are the implications for consumers?

6. What are the tools available to the FED for controlling the money supply? Which are used most often? Which are most effective?

7. How does the money multiplier help to determine the effects of monetary policy?

8. What are the pros and cons of using monetary policy, as opposed to the use of fiscal policy, for implementing economic policies and practices?

Posted Date: 2/4/2014 1:51:03 AM | Location : United States

Ask an Expert

Related Discussions:- Pros and cons of using monetary policy, Assignment Help, Ask Question on Pros and cons of using monetary policy, Get Answer, Expert's Help, Pros and cons of using monetary policy Discussions

Write discussion on Pros and cons of using monetary policy
Your posts are moderated

Write your message here..

Related Questions

Multiplier, concept of multiplier - static and dynamic concept of multiplier - static and dynamic

Economics, Consider the following: The city council has just approved the c... Consider the following: The city council has just approved the construction of a water park in your town. You are responsible for studying the impact of the new water park on the l

Monetary, 1. Suppose the banking system has reserve of $750000, demand depo... 1. Suppose the banking system has reserve of $750000, demand deposits of $2500000 and a reserve requirement of 20%. a. if the fed now purchases $125,000 worth of govt bonds from t

Annual income from an apartment, The annual income from an apartment comple... The annual income from an apartment complex is $20,664. The annual expense is estimated to be $3,414. The apartment complex could be sold for $146,499 at the end of 10 years. If yo

Fixed versus floating exchange rates, Fixed versus floating exchange rates:... Fixed versus floating exchange rates: To begin with, we will briefly review the balance of payments (BOP) table of a nation that you studied in the course on international eco

Describe the short run effect of the supply shock, Question : The long-... Question : The long-run position of an economy is described by the quantity theory of money: M/P = L (Y, r) Where M: nominal money stock; P: price level; Y: real income a

Determined that the firm''s cost function, Robert's New Way Vacuum Cleaner ... Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for t

Say''s law of market, Critically examine Say''s law of market Critically examine Say''s law of market

Important the industry effects, Firm effects are more important the industr... Firm effects are more important the industry effects. What does this mean? Can you think of situations where this might not be true?

Explain the economy automatic stabiliser, Explain the economy automatic sta... Explain the economy automatic stabiliser A budget deficit is shortfall between a government's tax revenue and its spending in a given year. If a government runs a budget defici