Group Exercise Global Economics

Both the assets of the central bank and the liabilities will be benefited. B) The Central Bank raises the required reserves ratio. The change in the reserves ratio will affect the bank credits, will reduce the volume of the deposits that are supported by the reserves and this will reduce the monetary base by raising the cost of the credits and loan interests making it less accessible to the public. C) The Central Bank decreases the discount rate and banks respond by borrowing from the Central Bank.
According to the easy monetary policy, when the central bank educes its discount rate, the interest rate in the currency in circulation and bonds markets will go down. Therefore People will be more interested in getting a loan from the bank as it is going to be easier to make profits. D) The Central Bank buys foreign currency from a domestic foreign exchange dealer. The country makes many trades in the international market, therefore instead of fixing their exchange rate they decide to buy or sell foreign currency, by doing this the money supply will increase because of the exchange reserves and this could create inflation. There are rumors about a computer virus attack on Atoms and people retrieve cash from the Atoms. The virus can have access to the information of account holders as pin numbers and amount of money. This action wont affect the monetary base nor the money multiplier but the money supply may increase as peoples financial identity may be stolen and used for online transactions, purchases and other movements in account holders. 2. (20 points) From 2007 to 20011 the U. S. Monetary base increased by 200 percent, but MI and MM increased by 40 percent and 25 recent respectively.
What caused this explosion in the monetary base? Why didn’t MI and MM increase by the same percentage as the monetary base? 3. (25 points) It is estimated that the U. S. Financial crisis of 2008 led to a loss of $7 trillion in the real estate industry due to the decline in housing prices. The stock market decline brought another $1 1 trillion in losses, and retirement accounts lost $3. 4 trillion. Describe the effect of these losses on the Real Alienable Funds market: a) to the supply of real alienable funds? Why? What will happen to the equilibrium real risk-free interest rate? Explain and graph your answers. 4. (25 points) The United States federal budget deficit fell to $1. 1 trillion in the 2012 fiscal year, down from about $1. 3 trillion a year earlier. Describe the effect of this fall in the deficit on the real alienable funds market: What will happen to the demand for real alienable funds? Why? What will happen to the supply of real alienable funds? Why? What will happen to the equilibrium real risk-free interest rate? Explain and graph your answers

Don't use plagiarized sources. Get Your Custom Essay on
Group Exercise Global Economics
Just from $13/Page
Order Essay
Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Order your essay today and save 25% with the discount code: COCONUTPlace Order
Live Chat+1(978) 822-0999EmailWhatsApp