Econ Essay 800-1200 Words

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The macro paper for this course will address the basic economics of monetary policy with emphasis on the timing of expansionary or contractionary policies and its effect on the control of the money supply, interest rates, inflation, and the economy.

First, review the Mayer readings.  Second, read/listen to the following interactives and articles:

St. Louis Federal Reserve Bank Economic Lowdown Podcast Series - Money

Fed Policy Interactive with Graph, Reffonomics

POLICY LAGS, AmosWEB Encyclonomic WEB*pedia (focus on monetary policy)

Q. and A. With the Fed’s John Williams: Timing of Rate Rise Is Overrated, New York Times April 16, 2015

 

Researching and reading additional articles are highly recommended, and including them in your bibliography. 

  1. Explain the functions of money making sure to give examples based on your everyday experience.
  2. Explain the two core objectives of the Federal Reserve in managing the U.S. money supply.  Discuss in detail three of the tools that the Fed uses to adjust the money supply to meet these objectives.
  3. How do changes in the money supply affect nominal interest rates?  What is the relationship between bonds and interest rates?
  4. What are the lags in monetary policy? Why are the lags important? What does John Williams, President of the Federal Reserve Bank of San Francisco, say about what are the current goals of monetary policy and what kind of information is needed to make decisions?
  5. Do you think that the Federal Reserve can be successful in its core objectives?
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