Free

"Policy Improvements" 9 - Coursework Example

Comments (0) Cite this document
Summary
The federal government achieves price stability by forecasting the inflation rate to a certain constant rate. Anytime the rate increases or decreases, aggregate…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.4% of users find it useful
"Policy Improvements" Coursework 9
Read TextPreview

Extract of sample ""Policy Improvements" 9"

The Fed’s Objective Function and the Philip’s Curve Policy Improvements by Using the Fed’s Objective Function and the Philip’s Curve
The Philips curve can be modified to maintain price stability and thereby increase effectiveness of monetary policies. The federal government achieves price stability by forecasting the inflation rate to a certain constant rate. Anytime the rate increases or decreases, aggregate demand is altered to maintain the inflation rate to the desired point (Meade, & Thornton, 2011). For example, the government should maintain price stability by stimulating aggregate demand when there is unemployment and recession but constrain it when there is inflation. Fiscal stimulus and increase in aggregate demand stabilizes prices and increase effectiveness of monetary policies through: increasing demand for labor and government spending, leading to business growth and economic stimulus. It also leads to lower unemployment rate and thus an increase in income per capita, which raises living standards. Therefore, the curve emphasizes the tradeoff between unemployment and the inflation rate. (Meade, & Thornton, 2011). The curve can hence be used to figure out the optimal level of unemployment that gives the desired inflation rate.
The objective function can determine the effective and appropriate monetary policy that will lead to the achievement of target economic goals depending on their effect on inflation and output levels. The Function describes the tradeoff between the output gap and the inflation gap and the economy’s responsiveness to deviations of output levels and the inflation rates from their ideals. The weight attached to the inflation rate in the objective function will represent the responsiveness of the economy to the changes in inflation. The function summarizes the total cost to the economy whenever there is an output gap or inflation gap. The output gap occurs whenever the real output of the economy differs from the potential production of the economy while the inflation gap exists whenever there is a deviation of the inflation rate from the ideal inflation rate (Boivin, & Giannoni, 2006). In such situations, the economy bears costs directly and indirectly in the form of underutilization of resources in the case where the output level is below the potential economy and the usage of resources at an unsustainable rate in the case where production is higher than the ideal. When the inflation rate is unexpectedly high, the costs of goods rise resulting in lower consumptions which ultimately leads to lower output and higher unemployment proportions.
References
Boivin, J., & Giannoni, M. P. (2006). Has monetary policy become more effective?. The Review of Economics and Statistics, 88(3), 445-462.
Meade, E. E., & Thornton, D. L. (2011). The Phillips curve and US monetary policy: what the FOMC transcripts tell us. Oxford Economic Papers, gpr047. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“"Policy Improvements" Coursework 9 Example | Topics and Well Written Essays - 250 words”, n.d.)
"Policy Improvements" Coursework 9 Example | Topics and Well Written Essays - 250 words. Retrieved from https://studentshare.org/macro-microeconomics/1696931-quotpolicy-improvementsquot-coursework-9
("Policy Improvements&Quot; Coursework 9 Example | Topics and Well Written Essays - 250 Words)
"Policy Improvements&Quot; Coursework 9 Example | Topics and Well Written Essays - 250 Words. https://studentshare.org/macro-microeconomics/1696931-quotpolicy-improvementsquot-coursework-9.
“"Policy Improvements&Quot; Coursework 9 Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.org/macro-microeconomics/1696931-quotpolicy-improvementsquot-coursework-9.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF "Policy Improvements" Coursework 9

Religion

4 Pages(1000 words)Essay

"Understanding and Analyzing Arguments"

...Enthymemes in the Media Enthymemes in the Media Enthymemes are a common type of rhetoric that is frequently used to make a conclusion. It usually has a hidden meaning to bring about a particular type of connotation. There are several types of enthymemes that can be used in the media. The most common areas where enthymemes are used include advertisements that are meant to entice the audience and the likely consumers. At times, they are also used in the courts of law to present a certain argument with the intention of obtaining a particular judgment. One of the proper examples is the advertising slogan that is used by Emerald perfume by Coty. It states “Want him to be more of a man? Try being more of a woman!” The hidden... in the Media...
1 Pages(250 words)Coursework

Manet's "Olympia" and Monet's "Les Nympheas" (The Water Lilies)

... number 03 February Video Review: Manet, Olympia and Monet, Les Nymphéas (The Water Lilies In his colorful painting titled Olympia Edouard Manet exploits a tradition of making sensual portraits of young women, which is old as art itself. But his erotic painting of a nude woman differs strikingly from what we used to see in the similar artwork of the ancient Greeks and Romans. The immediate model for Manets Olympia was Titians Venus of Urbino. In his painting Manet rejects some elements of the academic technique stripping away a traditional veil of mythology intrinsic to paintings alike created by his forerunners. By his Olympia Manet dared to challenge the established artistic ideas. A nude woman portrayed in his painting does... number 03...
1 Pages(250 words)Coursework

Comparing two companies - "New look" and "Next"

...Comparing two companies -NEW LOOK & NEXT Contents Contents 2 Executive summary 3 Introduction 3 Company Profile of both organisations 4 SWOT analysis 5 SWOT of Next 5 SWOT of New Look 7 Management and leadership styles of the two organizations 9 Organisation structure 11 Conclusion & Recommendations 12 References 13 Executive summary The following report is a detailed discussion of the two companies namely NEXT and NEW LOOK in terms of leadership and the management styles that these companies follows which the companies effectively uses to solve the challenges being faced by the organization. The textile industry is facing a lot of challenges these days that is evidenced by increasing competition, changes in the consumer...
10 Pages(2500 words)Coursework

How does the book "Mindsight" explain the happiness one can acquire that is listed in the book "Happiness Hypothesis"

...The Emotions and Happiness in Haidt, Siegel and Aristotle Table of Contents Introduction 3 Discussion 4 Works Cited 8 Introduction This paper explores the way s the emotions are tied relationally to happiness, as reflected in the works of Aristotle, Haidt, and Siegel. The paper attempts to answer the second prompt in other words, that seeks how the human emotions relate to happiness from the perspective of those three thinkers as reflected in their books and philosophies. The reference works for this paper are ‘The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom’ by Jonathan Haidt and ‘Mindsight: The New Science of Personal Transformation’ by Daniel Siegel (Haidt; Siegel). There is value first in exploring Aristotle’s...
6 Pages(1500 words)Coursework

Discuss the proposition: "Lazarillo had no choice but to become what he became"

... Lazarillo de Tormes and the swindler Lázarillo is a boy of humble origins from Salamanca. He is given birth inthe miller in a village near Salamanca. His father had been killed in a war when he was still a child. His mother subsequently moved to Salamanca and she started a relationship with a black stable-man who later becomes Lazarillos stepfather. This relationship grew and produces a half brother of Lazarillo and suddenly it ended when the stepfather was whipped and basted with hot fat for theft. Lazarillo mother lashed and ordered not to have any further contact with her husband.  It became so difficult for her to take care for Lazarillo. She thought what to do but she made up her mind to hand over Lazarillo to a blind man... Lazarillo...
2 Pages(500 words)Coursework

"Modeling Money"

...are constant hence the consumer’s decision to hold cash is dependent on supply and demand. Quantitative Easing Program Second quantitative easing (QE2) was a strategic government policy aimed at reducing the mortgage rate and Treasury yields, as well as increase economic stimulus through the large-scale purchase of assets. It led to the decline of yields on longer-maturity Treasuries and other securities following the Federal announcement of its intention to increase its holding of longer-term securities (Christensen & Gillan, 2014). This may have been caused by expectations of a decline in risk premiums for longer-term debt securities. Also, the strategy may have had temporary effects of increasing market liquidity...
1 Pages(250 words)Coursework

"Financing, Valuation, and Rating Agencies"

...Sources of Finance for a Convenience Store al Affiliation Sources of Finance for a Convenience Store. A convenience store is a shop located at strategic locations selling fast moving products such as tobacco, snacks, and magazines. The stores are usually run by an attendant and are at the epicenter of an extremely active society. The most preferred site is at a junction of busy commercial streets or industrial packs to serve workers. Other utilities may include a coffee shop and a gas station that are among the top priorities of a working people. Fast moving products translate to mobile cash and, therefore, a good profit making business. Equity Financing is one way to get capital to start up a convenience store. Equity financing... of Finance ...
1 Pages(250 words)Coursework

"Amazing Grace" song

...Song Amazing Grace History Amazing Grace is a hymn song that was composed as the John Newton’s spiritual autobiography. John Newton was born in 1725, in Wapping in England a place near Thames (Jeffrey, 2008). Johns father was a shipping merchant who a Catholic and had some sympathies of Protestant, but his mother was an ardent independent unaffiliated to the Anglican Church. His mother intended wanted John to become a clergyman, but she succumbed to death out of tuberculosis when the he was just six. The other years John stayed with his emotional distant stepmother as his father was busy doing business in the sea. John spent some other time in a boarding school where he was mistreated and at eleven he joined his dad is shipping... Amazing...
2 Pages(500 words)Coursework

"Taylor Rule and Inflation Targeting"

...Taylor Rule and Inflation Targeting al Affiliation) Taylor Rule and Inflation Targeting The Taylor rule asserts that the Federal Reserve relies on the estimated economy’s unutilized resources and inflation behavior to allocate funds rate (Hetzel, 2000). Taylor rule offers recommendations on how the Federal Reserve can address short-term economic changes and long-term inflation by setting short-term interest rates. Apparently, this rule is not an effective guide of economic policy. This emanates from the fact that the rule seeks to recommend how the Federal Reserve should control inflation instead of preventing it from occurring (Hetzel, 2000). Indeed, the rule reckons how the Federal Reserve System has raised the funds...
1 Pages(250 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Coursework on topic "Policy Improvements" Coursework 9 for FREE!

Contact Us