Posted: December 12th, 2016
1. Define the monetary policies and explain briefly when /why the Fed uses each of them.
2. Explain the impact of each monetary policy on the Product Market. How equilibrium income (real GDP) and the price level are going to be affected by the change in money supply?
3. What monetary tools can the Fed use to affect money supply?
4. What are the Reserve Requirements and how they are used to change money supply?
5. What is the Discount Rate and how is it used to change money supply?
6. Define Open market operations and explain briefly how they are used to affect money supply.
7. Define the Money multiplier and explain briefly its impact.
8. Who creates money? Explain briefly the money creation process.
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