Monetary economics

The Forecasting for the June 15th financial instruments of the S&P 500, 10 year T-Notes (yield), the gold price, the oil (WTI), the unemployment rate, and the Euro. My reasoning for these instruments was a mix between guessing and little economic reasoning. Out of the 6 financial instruments I was closest to 10 year T-Notes (yield), and the oil (WTI). While the other four instruments I was either in the right direction or the market went in the opposite of what I predicted. On May 18th the S&P…

of Exchange. Each day we exchange money for some form of good or service. Our economic growth stimulates from the exchange of money. When money is exchanged, bartering is eliminated. Money is a social invention with which resource suppliers and producers can be paid and that can be used to buy any of the full range of items available in the marketplace. (McConnell, p. 630) Second, money is a Unit of account. Monetary units (Money) measure the worth of goods, services and resources.…

of the Federal Reserve System. It also counts as the central banking system of the United States. It was created by the congress and it’s purpose was to provide the nation with a safer and more flexible monetary and financial system. It was designed to give an image of the economy and on economic activity in all parts of the nation. The Federal Reserve System is run by a board of governors and also the Chairman. It includes seven members all together. There are twelve regional Federal Reserve…

not to increase interest rate. Some support it and others don’t. Based on the Quantity Theory of money and its relationship to interest rate, the overall effect would be neutral. The increase wouldn’t significantly change the current state of our economic, therefore the end result would be neutral, creating a balance between the inflation rate and nominal interest rate. Quantity theory of money is a theory that stated that the quantity of money available determines the price level and the…

that serve as money, the effects of actions taken by the Fed to the economy, steps the Fed can take to increase the money supply, and causes for too little money or spending in a recession are important in attaining proper comprehension of the US monetary system. In today’s world, money is used to purchase…

include alternating dates of peaks and lows in the economy. The committee keeps track of the business activity in the economy by keeping records of employment, production, income and sales. The committee considers a recession; a significant decline in economic activity spreads across the economy and can last from a few months to more than a year (NBER). Investopeda.com referrers to a recession as “a significant decline in activity across the economy, lasting longer than a few months. It is…

proposed an expansionary fiscal policy where he aims to increase government spending on infrastructure and the military to stimulate the economy and increase employment, all while cutting taxes. As a result, the Fed may choose to pursue a contractionary monetary policy and increase interest rates in order to decline investment and GDP and fight inflation (Reuters).…

through, followed by the second part discussing whether I believe an extended QE programme should be implemented in the UK. 1) How does QE operate? QE was firstly conducted by Bank of Japan in 1990s to combat deflation, and then this unconventional monetary policy has been extensively used by central banks around the world post 2007 financial crisis. The design of QE can vary by countries, and typically involves large scale purchases of long-dated government bonds financed by the central bank…

commodity) has shown to be more elastic to cater to economic needs. There are cons as well: gold is a very scarce resource. When the world relied on the gold standard, the countries with large reserves of gold prospered while the developing nations fell behind because they lacked gold. Fiat currency is no saint in the matter of our economy either. It has been manipulated…

Part 1 1.1 What are central bank and its main function? A central bank, reserve bank, or monetary authority is an institution that manages a state's currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and usually also prints the national currency, which usually serves as the state's legal tender…