questions are on files

questions are on files.

.

Money & Banking

A)

Define

(in your own words, please do not use the book, or other online resources)

and give a strong, unique, example for the following terms. Answers will be checked for originality.

Store of Value:

________

Automatic Stabilizer :

___________

FOMC:

_____________________________________________________

Discount Rate:

_____________________________________________________

List the names and dates of the last four chairmen of the FED, starting with the current one:

_____________________________________________________

Transaction Costs:

_____________________________________________________

Federal Funds Rate:_____________________________________________________

Section 1

: Money Supply

Look at the following H6 report from the Federal Reserve:

http://www.federalreserve.gov/releases/h6/current/…

For the most recent available month and one year before that, fill out the following table (use

seasonally adjusted figures):

Category

Most

Recent

One Year

Before

Percentage

Change

Currency

Demand Deposits

Traveler’s Checks

Checkable Deposits at Commercial Banks

Checkable Deposits at Thrift Institutions

Savings Deposits at Commercial Banks

Savings Deposits at Thrift Institutions

Small

Denomination Time Deposits,

total

Retail Money Funds

What is

M1

in the most recent year?

_________________

One year before?

_________________

Percentage change?

_________________

What is

M2

in the most recent year?

_________________

One year before?

_________________

Percentage change?

_________________

What category most

caused

the

change

in M2?

_________________

Section

2

:

Fiscal Policy

Graph the following situation for the economy:

1)

Current

Real

GDP

=

$

17.5T

Potenti

al

Real GDP = $20T

MPC = .

9

How much would be necessary to

close the recessionary / inflationary

gap

(circle

one)

using government spending

?

_____________

o

r taxes________

__

______

?

2)

Current

Real

GDP

=

$

21

.5T

Potenti

al

Real GDP = $20T

MP

S

= .

2

How much would be necessary to

close the recessionary / inflationary

gap

(circle

one)

using government spending

?

_____________

or taxes________

__

______

?

Section

3

:

Federal Budget &

National Debt

Take the Federal

Budget Challenge and try your hand at fi

xing the

problems

with the economy.

https://www.federalbudgetchallenge.org

When taking this challen

ge,

use your

economic reason

ing skills to

decide

what to cut and raise

for the different spending/

taxing categories.

Copy & paste your summary below:

 
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