International Monetary Fund

Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economies long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” This is often called dual mandate and guides the Feds decision making in conducting monetary policy strategies. The Fed has a full employment goal for the US, 0% unemployment is…

The immediate cause for the Greek debt crisis is the dramatic Greek public finance situation, which was hidden through creative accounting and manipulations for many years. In the book, “Europe and the Financial Crisis,” Antimo Verde describes that in 2011 the Greece public debt is nearing the “120 per cent of [its] GDP” and the “deficit/GDP ratio exceeds 13.5 per cent.” (323, Verde) Therefore, Greece was believed to be close to a default and risk of contagion to other weak countries, such as…

. In your own words, why did the debt problem occur? Debt problem occurs when you do not save money for an emergency situation. The use of all monthly payments means that you will not have reserve funds of an emergency situation occurs. When these situations occur, the more susceptible the more you will likely to have a debt. Also, when you own too many credit cards and unable to manage while using it, and when you set up budgets that you do not follow, etc. All of that eventually you will…

A fixed rate is a rate the government or in most cases the central bank sets and maintains as the official exchange rate. A set price will be determined against a major world currency. The most common currency countries usually fix to is the U.S. dollar. The local exchange rate is maintain by the central bank buys and sells its own currency on the foreign exchange market in return for the currency to which it is pegged. According to Xu unlike the fixed rate, a floating exchange rate is…

ranking in 2010. In three out of six categories (infrastructure, timeliness and customs) Germany ranks in the Top 3. The other categories that the World Bank uses to calculate the overall ranking are logistics competence, tracking & tracing and international shipments. World’s Best Logistics…

Key reasons of monetary policy Lithuania is primarily trading with the Europe; the exports to EU are 65% of the total while the imports from the country remain around 58% (Government statistics, 2010). Thus, pegging the currency to Euro ensure that the import and…

the government. There are many policies that can be used to tackle these certain goals, for example fiscal and monetary policy. Fiscal is a change in government spending or taxation, an example of fiscal policy is to reduce taxation and thus give consumers more spending power, hopefully increasing economic activity. Monetary policy is centred on interest rates, for example reducing…

be used to create broad or focused changes in many markets. Some cons are that it is controlled exclusively by the government and can be prone to government bias or corruption. Part 2: Monetary theory is the basic rules and underlying guidelines of how monetary policy should be used in a society. Monetary policy is…

Introduction It is agreed that the influential Mudell-Fleming model and the Dornbusch overshooting model play significant roles in practical monetary policies for more than thirty years. Nowadays these significant economic models are still the fundamental theories to build up the monetary policy and to interpret the functions of modern monetary expansion in macroeconomics. However, in view of dynamical complication of the foreign exchange rates, the behaviour of exchange rates still could not…

In the AS/AD model, consider an economy where the level of production is below the natural level. Would the economy stay forever in this position? Explain the adjustment process in the economy. Suggest a fiscal policy to increase output. Analyse the effect of this macro‐policy on the price level, employment and fiscal deficit. (1500 words) The natural level of production is determined by an economy’s supply potential. In the short run an economy is usually above or below the natural rate of…