Questions on the subject of macroeconomics
Please answer all of the following macroeconomics questions correctly and as briefly as possible.
Macroeconomics
- What are the 3 characteristics of money? Give an example of each?.
- How does the federal reserve create money?
- Using simple money multiplier, what will happen to money supply if the reserve ratio 0.2 and Federal reserve gives a bank $100 in reserves?
- Why is the financial sector important to economic activity?
- Why is it important for the macroeconomy that the financial sector operates efficiently?
- Why are not credit cards money? What is the difference between money and credit?
- Demonstrate the effect of the following on price and output using aggregate demand and aggregate supply model:
a)Expansionary monetary policy.
- Define the law of diminishing control and explain how it relates to the history of financial regulation in the U.S since 1930s. Be sure to mention particular laws, their provisions, and the responses by financial institutions.
- Were the 4 unconventional policies the federal reserve implemented after financial crises effective? What problems might they create in future?
- What guidelines do economists suggest for creating regulatory policies? Upon what principles are these guidelines based?
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