Which one? If not, what economic system do you think your nation runs? 2. In the space below, organize your economic data. Highlight statistics that you think would indicate that your country runs a market-oriented economy.
Satoria Mckenzy Principals of Economics (Ref # 380267) Spring 2013 The Full Economic Impact of an Increase in the Minimum Wage Where minimum began - The history of minimum wage, what is minimum wage, the laws of minimum wage. The minimum wage has a strong social appeal, rooted in concern about the ability of markets to provide income equity for the least able members of the work force. For some people, the obvious solution to this concern is to redefine the wage structure politically to achieve a socially preferable distribution of income. Thus, minimum wage laws have usually been judged against the criterion of reducing poverty. Statutory minimum wages were also proposed as a way to control the proliferation of manufacturing industries.
Monetary Policy is used to make changes in the nation’s supply of money. These changes affect interest rates which affects the amount of spending. Monetary policy is supposed to get price levels stable increase employment and grow the economy. In chapter 15 of our text it shows a consolidated balance sheet of the Federal Reserve Banks. The Federal Reserve Banks (there are twelve Federal Reserve Banks) are really a “banker’s bank” (McConnell, Brue 2005).
Evaluating Fiscal Policy Alternatives Simulation ECO 372 November 28, 2011 Matthew Angner A government has a couple of roles the need to enforce in order to ensure that their people and land will be able to support them through any times. One of these roles is to invoke and sustain economic growth. The government can achieve this by trying to manipulate the trends in that particular economy, though fiscal policy. Fiscal policy is changes that are made to government spending or taxes that leads to one of two conclusions. One of these conclusions is that the economy will stimulate because of the changes being made, or the economy will slow down.
To increase their taxes would be appropriate and this would be stream lining taxes at a time when the economy needs a boost. The Keynesian economists would look at government spending as a means for the government to stop the little growth the economy has had and is to have. The government spending would make it so the people would not have the money to spend within the states and they would have to go without needs and desires. This in turn would be the money that could be used within the economy.
How is money created? Money is created by the Federal Reserve Bank (a U.S. “central” bank) at certain times or taken out of the economy at certain times to create a favorable balance that enables economic growth, low inflation, and a reasonable rate of unemployment. The monetary policy is deliberately changed to “influence interest rates and the total level of spending in the economy” (McConnell & Brue, 2004). Spread between the DR (discount rate) and FFR (federal funds rate). If the spread is positive, the banks will “always” borrows from other banks.
Money has four major functions and medium of exchange is what the nation uses the most in current economy. Medium of exchange is where seller accepts money in exchange of goods and services. The central bank manages nation’s monetary system by selling government bonds in the open-market to maintain control of supply and demand of money. Economic recovery is the stated direction of the recent monetary policy in the United States. Interest rates can effect economy’s production and
It is also a part of the simple circular flow model. Consumption is the largest factor in the gross domestic product. Many economists base the economic growth of their countries on consumption. The article in the Wall Street Journal, Consumption to Remain Restrained, Says Kruger, by Sudeep Reddy, gives definition to a few of the economic terms studied in this class. The article clearly defines consumption, consumers, and other key terms, that pertain to the economy.
Only those workers who are earning less than the minimum will be directly affected. The government believes that increasing the minimum wage will benefit the poor. It is true that some people will receive higher wages if the minimum wage rate is raised, but those receiving higher wages can only do so at the expense of others who will become unemployed. Minimum wage is a basic government-imposed price control. With the minimum wage price controls, a floor is set which indicates a minimum price that must be paid for certain goods or services.
Explain the meaning of money multiplier and its role? (6) The money multiplier calculates the maximum amount of money that an initial deposit can be expanded to with a given reserve ratio. Money multiplier can also be expressed as a ratio of a change in money supply divided by a change in money base. The role of the multiplier is that it explains why output fluctuates.the money multiplier is a multiple of reserves; this multiple is the reciprocal of the reserve ratio, and it is an economic multiplier.In monetary economics, a money multiplier is one of various closely related ratios of commercial bank money to central bank money under a fractional-reserve banking system. Most often, it measures the maximum amount of commercial bank money that can be created by a given unit of central bank money.