Week 3 Discussion Questions

Week 3 Discussion Questions ECO/372 Principles of Macro sparings Discussion Questions What are the uses of gold? coin is used to purchase goods, services, and profits off debt. gold serves as a medium of exchange, as a pulsate in of value, and as a unit of account. How do the national and commercial-grade banks create bullion? The banks create specie by put up money to people with affair. Every time a loanword is made by a bank stakes is charged on that loan, thus creating money. Banks are just like other businesses. Their product just happens to be money. Other businesses sell widgets or services; banks sell money -- in the form of loans, certificates of nonplus (CDs) and other financial products. They make money on the interest they charge on loans because that interest is higher than the interest they behave on depositors accounts. What is the difference between contractionary and expansionary monetary insurance policy? The polis h of a contractionary policy is to reduce the tag on of money to the parsimony and thus curb inflation while expansionary policy aims to accession the supply of money and thus stimulate economic activity. What happens to the money supply, the interest place and the economy as a tout ensemble, when the national Reserve sells bonds, what happens when the Federal Reserve buys bonds?

When the government sells bonds it decreases the money supply and sum ups the interest rates. The Economy as a whole is alter when the government sells these bonds because it forces Americans not to spend. When the government buys bonds Interest r ates impart decline because supply of money! has without delay increased. Since money is now cheaper people are giveing to spend more, this will backsheesh to increased demand for goods which should in turn increase output. outgrowth output will require more duty to render for the extra production. Since more is being demanded then the scathe take will increase. This is also known as Inflation. be the factors that add to the...If you want to get a full essay, disposition it on our website: BestEssayCheap.com

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