Macroeconomics homework help!!!!!?

Posted on 2014-04-23 11:02:00 in Economics by XCHERRY369X

I need some help. If anyone knows these answers PLEASEEEEEE answer, even if it's only one. Thank you :)





What are the three tools that the Federal Reserve has at its disposal to influence money supply? Explain how each of these tools works AND how the each of these actions will hopefully increase the creation of money. Be sure to explain how money is created as part of your explanation. Explain how it is possible for the Federal Reserve to attempt to increase the money supply and yet the money supply could remain unchanged or even be reduced.





Suppose the government decides to increase spending paid for by increased borrowing. After the government action, we observe interest rates rising. Why did this occur? 1) Under what circumstance will the government spending cause private sector investment to decrease and cause no change in aggregate demand. Graph this situation on the loanable funds graph. 2) Under what circumstance will the government spending cause private sector investment to actually increase. Graph this situation on a separate loanable funds graph. 3) In this latter case, what caused private sector investment to increase? 4) Why did the firms invest after the government spending but not before it?





Suppose consumer spending is reduced. In the Classical view of the economy, national output will stay the same and only how the money is spent will change. Why? Explain using the flow of goods diagram.





Suppose interest rates are 8% in the market and at this interest rate $100 billion worth of investment takes place. Now suppose interest rates fall to 6% and $140 billion worth of investments take place. Explain in terms of rate of return why more investment took place at the lower interest rate. Obviously, more investment now takes place, why didn’t these investments take place at the higher interest rate (Be specific)?





Explain how when the Fed buys a $100 worth of bonds from the public, this might create a much larger amount of money in the economy. In particular, using the simple money multiplier, if the reserve requirement is only 5% (.05) how much money could be created in this example.





Explain why many economists argue that it was a mistake for the government to regulate the type of loans that S&Ls could make. If it was a mistake to regulate the types of loans and S&L can make, then why did deregulation of the types of loans S&Ls could make the S&L crisis worse?





Explain the structure of the Federal Reserve. What is the role of the Fed district bank presidents? How do these district bank presidents obtain their position? Who are the board of governors? Who make up the board of governors and how were they appointed? What is the open market committee and who sits on this committee? Who owns the Federal Reserve? Controls it? Why was the Fed constructed in this manner?

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