Money, Banking, Monetary Policy, and Bank Regulation

Question 1

Answer the following questions about money. 

1. Explain the basic functions of money. 
2. Compare and contrast the types of money. 
3. What is the difference between M1 and M2?  Why aren’t M1 and M2 just combined? 

Question 2

Answer the following questions about the Federal Reserve. 

1. What are the 3 functions of a central bank? 
2. Describe the structure of the Fed.  How is the Fed organized geographically?  What is the process of appointing people to the Fed? 
3. What powers does the Fed have?  What do each of these powers do? 

Question 3

Answer the following questions. 

1. The total amount of U.S. currency in circulation divided by the U.S. population comes out to about $3,500 per person. That is more than most of us carry.  Where is all the cash?
2. Explain the positive (benefits) and negative (costs) aspects of a requirement that banks hold 100% of their deposits as reserves?  Would this be feasible in the U.S.?
3. Explain what would happen if banks were notified they had to increase their required reserves by one percentage point from, say, 9% to 10% of deposits. What would their options be to come up with the cash?

Question 4

Suppose the Fed conducts an open market purchase by buying $10 million in Treasury bonds from Acme Bank. Sketch out the balance sheet changes that will occur as Acme converts the bond sale proceeds to new loans. The initial Acme bank balance sheet contains the following information: Assets – reserves 30, bonds 50, and loans 50; Liabilities – deposits 300 and equity 30.

Question 5

Suppose the Fed conducts an open market sale by selling $10 million in Treasury bonds to Acme Bank. Sketch out the balance sheet changes that will occur as Acme restores its required reserves (10% of deposits) by reducing its loans. The initial balance sheet for Acme Bank contains the following information: Assets – reserves 30, bonds 50, and loans 250; Liabilities – deposits 300 and equity 30.

Question 6

Answer the following questions. 

1. All other things being equal, by how much will nominal GDP expand if the central bank increases the money supply by $100 billion, and the velocity of money is 3?
2. Suppose now that economists expect the velocity of money to increase by 50% as a result of the monetary stimulus. What will be the total increase in nominal GDP?
3. If GDP is 1,500 and the money supply is 400, what is velocity?
4. If GDP now rises to 1,600, but the money supply does not change, how has velocity changed?
5. If GDP now falls back to 1,500 and the money supply falls to 350, what is velocity?

Exchange Rates, International Capital Flows, Government Budgets, & Fiscal Policy

Question 1

Answer the following questions regarding Exchange Rates and International Capital Flows. 

1. Suppose a country has an overall balance of trade so that exports of goods and services equal imports of goods and services. Does that imply that the country has balanced trade with each of its trading partners?
2. What does it mean to hedge a financial transaction?
3. What does it mean to say that a currency appreciates? Depreciates? Becomes stronger? Becomes weaker?

Question 2

A British pound cost $1.56 in U.S. dollars in 1996, but $1.66 in U.S. dollars in 1998.

1. Was the pound weaker or stronger against the dollar?
2. Did the dollar appreciate or depreciate versus the pound?
3. Calculate the cost of a U.S. dollar in terms of British pounds in 1996 and 1998.

Question 3

Answer the following questions regarding The Impacts of Government Borrowing. 

1. What is the difference between a progressive tax, a proportional tax, and a regressive tax?
2. What is the difference between a budget deficit, a balanced budget, and a budget surplus?
3. What is the difference between a budget deficit and the national debt?

Question 4

Answer the following questions about government borrowing—be sure to show your calculations. 

1. A government starts off with a total debt of $3.5 billion. In year one, the government runs a deficit of $400 million. In year two, the government runs a deficit of $1 billion. In year three, the government runs a surplus of $200 million. What is the total debt of the government at the end of year three?
2. If a government runs a budget deficit of $10 billion dollars each year for ten years, then a surplus of $1 billion for five years, and then a balanced budget for another ten years, what is the government debt?

Question 5

Specify whether expansionary or contractionary fiscal policy would seem to be most appropriate in response to each of the situations below and justify your answer. 

1. A recession.
2. A stock market collapse that hurts consumer and business confidence.
3. Extremely rapid growth of exports.
4. Rising inflation.
5. A rise in the natural rate of unemployment.
6. A rise in oil prices.

The Impacts of Government Borrowing & Macroeconomic Policy Around the World

Question 1

Answer the following questions regarding The Impacts of Government Borrowing. 

1. In a country, private savings equals 600, the government budget surplus equals 200, and the trade surplus equals 100. What is the level of private investment in this economy? 
2. Why have many education experts recently placed an emphasis on altering the incentives faced by U.S. schools rather than on increasing their budgets? Without endorsing any of these proposals as especially good or bad, list some of the ways in which incentives for schools might be altered. 
3. What are some steps the government can take to encourage research and development?
4. What is the theory of Ricardian equivalence?

Question 2

Assume an economy has a budget surplus of 1,000, private savings of 4,000, and investment of 5,000.

1. Write out a national saving and investment identity for this economy.
2. What will be the balance of trade in this economy?
3. If the budget surplus changes to a budget deficit of 1000, with private saving and investment unchanged, what is the new balance of trade in this economy?

Question 3

Imagine an economy in which Ricardian equivalence holds. This economy has a budget deficit of 50, a trade deficit of 20, private savings of 130, and investment of 100. If the budget deficit rises to 70, how are the other terms in the national saving and investment identity affected?

Question 4

Answer the following questions about The Impacts of Government Borrowing —be sure to show your calculations. 

1. Based on the national saving and investment identity, what are the three ways the macroeconomy might react to greater government budget deficits?
2. If a government runs a budget deficit of $10 billion dollars each year for ten years, then a surplus of $1 billion for five years, and then a balanced budget for another ten years, what is the government debt?

Question 5

Answer the following questions about Macroeconomic Policy Around the World. 

1. What other factors, aside from labor productivity, capital investment, and technology, impact the economic growth of a country? How?
2. What are the two types of unemployment problems?
3. What is the primary way in which economists measure standards of living?
4. Demography can have important economic effects. The United States has an aging population. Explain one economic benefit and one economic cost of an aging population as well as of a population that is very young.
5. Explain why is it difficult to set aside funds for investment when you are in poverty.

Question 6

Retrieve the following data from The World Bank database

for India, Spain, and South Africa for the most recent year available:

• GDP in constant international dollars or PPP
• Population
• GDP per person in constant international dollars
• Mortality rate, infant (per 1,000 live births)
• Health expenditure per capita (current U.S. dollars)
• Life expectancy at birth, total (years)

Using the data above, answer the following questions. 

1. Prepare a chart that compares India, Spain, and South Africa based on the data you find. Describe the key differences between the countries. Rank these as high-, medium-, and low-income countries, explain what is surprising or expected about this data.
2. Use the Rule of 72 to estimate how long it will take for India, Spain, and South Africa to double their standards of living. 

International Trade, Globalization, and Protectionism

Question 1

Answer the following questions on International Trade. 

1. Why do countries place restrictions on international trade? 
2. Suppose the United States imposes a quota on copper imports.  Explain who would benefit from the tariff and who would be hurt by the tariff and why. 
3. Why does the United States not have an absolute advantage in coffee?

Question 2

France and Tunisia both have Mediterranean climates that are excellent for producing/harvesting green beans and tomatoes. In France it takes two hours for each worker to harvest green beans and two hours to harvest a tomato. Tunisian workers need only one hour to harvest the tomatoes but four hours to harvest green beans. Assume there are only two workers, one in each country, and each works 40 hours a week.

1. Draw a production possibilities frontier for each country. Hint: Remember the production possibility frontier is the maximum that all workers can produce at a unit of time which, in this problem, is a week.

Question 3

If trade increases world GDP by 1% per year, what is the global impact of this increase over 10 years? How does this increase compare to the annual GDP of a country like Sri Lanka? Discuss.

Hint:  To answer this question, here are steps you may want to consider.

1. Go to the World Development Indicators (online) published by the World Bank.
2. Find the current level of World GDP in constant international dollars. Also, find the GDP of Sri Lanka in constant international dollars.
3. Once you have these two numbers, compute the amount the additional increase in global incomes due to trade and compare that number to Sri Lanka’s GDP.

Question 4

Answer the following questions from Globalization and Protectionism. 

1. Who does protectionism protect? What does it protect them from?
2. How does protectionism affect the price of the protected good in the domestic market?
3. What is dumping? Why does prohibiting it often work better in theory than in practice?
4. Why is trade a good thing if some people lose?

Need Help with Your Assignment? Let us Help you

Place Your Order

We guarantee you the following if you order your paper with us

High Quality Papers

All papers are written by ENL (US, UK, AUSTRALIA) writers with vast experience in the field. We perform a quality assessment on all orders before submitting them.

Timely Delivery

Do you have an urgent order?  We have more than enough writers who will ensure that your order is delivered on time. 

100% Original

We provide plagiarism reports for all our custom written papers. All papers are written from scratch.

24/7 Customer Support

Contact us anytime, any day, via any means if you need any help. You can use the Live Chat, email, or our provided phone number anytime.

Confidential and Secure

We will not disclose the nature of our services or any information you provide to a third party.

Stressed? We got you covered

Money-Back Guarantee

Get your money back if your paper is not delivered on time or if your instructions are not followed.

We Guarantee the Best Grades

Get a Professional Answer