09 Jul macroeconomics
Question Description
All sources used must be clearly referenced and cited according to APA standards. This includes using quotation marks for direct quotes. Do not include the questions with your answers.
Question #1
A) List the tools used by the Federal Reserve to expand and contract the money supply and clearly explain how they work.
B) Evaluate the effectiveness and efficiency of each tool and explain which are used the most often and why.
Question #2
Suppose that the Federal Reserve was dissolved and replaced with a system of private banks that compete with each other. If you were overseeing this new industry, what would you do with the goal of making it work successfully?
Question #3
A) What are the short and long run effects of the Federal Reserve steadily increasing the money supply? How do we know when it is time to stop increasing the money supply and switch to another alternative?
B) What are the short and long run effects of the Federal Reserve steadily decreasing the money supply? How do we know when it is time to stop decreasing the money supply and switch to another alternative?
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