The Fed’s mandate policy goals are “maximum employment, stable prices, and moderate long-term interest rates.” Explain the harmony among these goals in the long run
PLEASE ANSWER ALL QUESTIONS: Query #1 (price four%) In June 2019, people and companies held $58 billion in foreign money and no traveler’s checks $1,375 billion in checkable deposits $9,000 billion in financial savings deposits $250 billion in time deposits $650 billion in cash market funds and different deposits In June 2019, banks held $850 billion in foreign money $875 billion in reserves on the central financial institution $950 billion in loans to households and companies Utilizing the knowledge talked about above, reply the next questions. Calculate the M1 and M2 measures of cash. Calculate the financial based mostly. What are the foreign money drain ratio and the banks’ reserve ratio? What are the M1 and M2 cash multipliers? How is the cash multiplier influenced by the banks’ reserve ration? Query #2 (price four%) Clarify for every occasion whether or not it modifications the amount of actual GDP provided, short-run combination provide, longrun combination provide, or a mix of them. Toyota and Honda construct extra vegetation in the USA Autoworkers comply with the next cash wage charge. Clarify for every occasion whether or not it modifications the amount of actual GDP demanded or combination demand in the USA. U.S. exports to the European Union growth. U.S. inflation charge is predicted to rise subsequent yr. Query #three (price four%) Suppose that the enterprise cycle in the USA is finest described by RBC concept and that new expertise will increase productiveness. Draw a graph to point out the impact of the brand new expertise available in the market for loanable funds. Draw a graph to point out the impact of the brand new expertise within the labor market. Clarify the when-to-work choice when expertise advances. Query #four (price four%) The economic system is in a growth, and the inflationary hole is giant. Describe the discretionary and computerized fiscal coverage actions that happen. Describe a discretionary fiscal restraint package deal that may very well be used that will not produce critical damaging supply-side results. Clarify the dangers of discretionary fiscal coverage on this scenario. Query #5 (price four%) The Fed’s mandate coverage targets are “most employment, secure costs, and average long-term rates of interest.” Clarify the concord amongst these targets in the long term. Clarify the battle amongst these targets within the brief run. Based mostly on the efficiency of U.S. inflation and unemployment, which of the Fed’s targets seems to have taken precedence since 2000?