Free

Review for Rules for monetary policy questions - Coursework Example

Comments (0) Cite this document
Summary
The rule for monetary policy based on money growth simply means using the amount of money circulating in the economy to control other economic factors like the price levels and the gross domestic product. The money growth rule revolves around either the contraction or expansion…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94% of users find it useful
Review Coursework for Rules for monetary policy questions
Read TextPreview

Extract of sample "Review for Rules for monetary policy questions"

Monetary policy Task Why have rules for monetary policy based on money growth been unsuccessful in recent years? The rule for monetary policy based on money growth simply means using the amount of money circulating in the economy to control other economic factors like the price levels and the gross domestic product. The money growth rule revolves around either the contraction or expansion of the amount of money circulating in the economy. For instance, a contractionary policy would involve the selling of government bonds in the open market. On the other hand, an expansionary policy would involve the purchase of the government bonds on the open market. More money in an economy stimulates economic growth. However, the excessively high level of money circulating in the economy induces inflation. Conversely, the excessively low level of money circulating in the economy kills economic performance and induces deflation. Since the association between the money supply and other economic indicators such as the gross domestic product and prices level or inflation has become irregular, the money growth based policies have been unsuccessful (What is money supply? Is it important?, 2014).
Why don’t policymakers want to adopt rules for monetary policy?
Adopting rules for the monetary policy is like suggesting that the economy regulators clearly understand all the variables within the economy and how they affect one another. The center stage for the formulations of rules for monetary policy is the interest rates and the economic output. It is currently clear that the performance of an economy is influenced by the performance of other institutions like the financial market, the capital market, and the financial institutions. These players add to the list of factors to be considered when formulating rules for monetary policy. The regulators have not been able to understand fully how the financial markets affect the economy, thus, controlling an unclear situation could cause damages. Therefore, the policy makers are reluctant to adopt rules for monetary policy (Swanson, 2014).
References
Swanson, A. (2014). What the US could gain and lose from monetary policy rules. Retrieved from http://www.forbes.com/sites/anaswanson/2014/08/25/the-advantages-and-disadvantages-of-rule-based-monetary-policy/
What is money supply? Is it important? (2014). Retrieved from http://www.federalreserve.gov/faqs/money_12845.htm Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Review Coursework for Rules for monetary policy questions”, n.d.)
Review Coursework for Rules for monetary policy questions. Retrieved from https://studentshare.org/macro-microeconomics/1697871-review-coursework-for-rules-for-monetary-policy-questions
(Review Coursework for Rules for Monetary Policy Questions)
Review Coursework for Rules for Monetary Policy Questions. https://studentshare.org/macro-microeconomics/1697871-review-coursework-for-rules-for-monetary-policy-questions.
“Review Coursework for Rules for Monetary Policy Questions”, n.d. https://studentshare.org/macro-microeconomics/1697871-review-coursework-for-rules-for-monetary-policy-questions.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Review Coursework for Rules for monetary policy questions

Monetary Policy A-level Coursework

..., editor, Order and Conflict in Contemporary Capitalism, Oxford University Press, Oxford. Campillo, M. and J.A. Miron (1997), "Why does inflation differ across countries", in C.D. Romer and D.H. Romer, editors, Reducing Inflation: Motivation and Strategy, University of Chicago Press, Charles L. Evans., (1998)., Real Time Taylor Rules and the Federal Funds Futures Market, , Economic Perspectives Croushore, D. and Stark, T. (1995)., Evaluating McCallum's Rule for Monetary Policy. Business Review, Federal Reserve Bank of Philadelphia Chicago.Cargill, T. F., M. M. Hutchison, and T. Ito (1997), The Political Economy of Japanese Monetary...
34 Pages(8500 words)Coursework

Monetary Policy Coursework

...policies on the stock market bubbles the paper also details some of the historic bubbles and crashes. How Monetary Policy can Influence the Stock Market Bubbles Table of Contents Abstract 1 Table of Contents 2 Chapter 1 Introduction 3 1.1 Monetary Policies and Stock Market Bubbles - an Overview 3 1.2 Aims and Objectives 5 1.3 Structure 6 Chapter 2 Literature Review 7 2.1 Monetary Policy and Stock Market Prices 7 2.2 Stock Market Bubble 9 2.2.1 Features of Stock Market Bubbles 11 2.3 Stock Market Bubbles and Crashes 11 2.4 Stock Market Bubbles and Monetary...
32 Pages(8000 words)Coursework

China and Monetary Policy

...-intensive and technology-intensive industries and those in industries enjoying high-level protection in Australia. Aswicahyono and Hill (1994) examine determinants of foreign investment shares in the Indonesian manufacturing sector and find product differentiation, technological capacity, skill intensity, absolute capital requirements, economies of scale and domestic policy regime to be significant in driving FDI. Driffield and Munday (2000) investigate the relationship between comparative advantages in UK industries and new inward investment into these industries. They find revealed industrial comparative advantage, R&D intensity, and advertising intensity, presence of economies of scale, past profits, absolute sales...
40 Pages(10000 words)Coursework

Economic Policie for the Monetary and Fiscal Policy

...Economic policies are classified into the monetary and fiscal policy in which the overall economic outcome is driven and predicted by the effectiveness of these two factors and the issue of wage price policy. Under a situation of fully flexible prices and wages, this would be the situation in which W/P is the nominal wage, Nd and Ns are labor demand and supply respectively. O is the output is the income and w/p is the real wage. This means that there exists a relationship between prices and wages in determining the economic cycles. O O N Y Nd Ns w/p W/P Ns Nd N Y The IS model for a closed...
5 Pages(1250 words)Coursework

Module review questions

...Module Review Questions Module Review Questions Key Trends in the Computer Peripheral Devices A computer peripheral refers to an extra device or features that are added to the computer. Such devices include the keyboard, mouse, camera, printer, scanner, speaker, microphone, tape driver and disk driver. They are very important since they help in increasing the abilities of the computer to perform its functions. As a result of the changing technology, several inventions have been made to improve the peripheral devices. Amongst these include the use of graphics cards, Wireless Optical Mouse 5000 and superior Visioneer, Microtek, HP and Umax scanners (Ceruzzi, 2000). I would like to point out that several developments would be made... Review...
2 Pages(500 words)Coursework

Module review questions

...Module review questions Discuss the advantages of a database management approach to the file processing approach? Giveexamples to illustrate your answer. -Firstly, the database management approach allows users to store a lot of information in one coherent component compared to the file processing approach where information is stored in many small files. For example, a database management system for employees in an organization provides room for all employee data to be stored in a single well-designed database system. On the other hand, the file processing approach leads to creation of different files for each employee (Panneerselvam, 2003). -The database management approach is also advantageous in that...
2 Pages(500 words)Coursework

7.5 part 1 review questions

... 7.5 part review questions “Planning and budgeting processes are notorious for their rigidity and irrelevance to management action.” How can planning be made relevant to the challenges facing a business? Planning and budgeting do not have to be equated as processes that are irrelevant and inflexible to management action. Changes in the external and internal environment of businesses should also necessitate modification to the organizations plans and budget processes. Planning can be made relevant by encompassing team building, consensus, and modeling. The planning process should help to evaluate and identify what a business has achieved and the acquired resources. The planning process should also consist of an analysis... 7.5 part review...
2 Pages(500 words)Coursework

7.5 part 2 review questions

...Development Process Development Process In a situation like this, I would suggest parallel transformation. Equally the previous and the formed makeup will run together. This technique has a high risk of accomplishment with fewer slips. The move to the new framework will occur not long after everybody has trust of the new framework. Should the new framework miss the mark concerning the clients desires, the old framework will even now be there. End client advancement is characterized "as a situated of techniques, systems, and devices that permit clients of programming frameworks, who are going about as non-expert programming engineers, eventually to make, change or expand a product antique". I would not be a supporter... Process Development...
1 Pages(250 words)Coursework

Quiz Review Questions

...Lecturer Quiz 3 Review Questions It is an important term in anthropology that means to recognize incorrectly 2. These integrated interlocking systems are used to controlling the youth behavior and actions. They include the prisons and education system. These complexes are used to nurture the great potential of the young people in the society who are being faced with myriad of challenges. 3. These identities are created by the populations regarded to be subordinate in response to any oppression subjected to them. These identities are developed when the individuals feel excluded from a network of positive credentials, opportunities, and education. In page 15, Rios indicate that the boys may embrace...
2 Pages(500 words)Coursework

Monetary policy in china

...Monetary policy in china Executive Summary The financial system of China is mostly dominated by the banking sector and the economy of China is considered as one of the largest economy of the world. The two domestic stock exchanges of china are the Shenzhen stock exchange and the shanghai stock exchange which were established in the year 1990. The financial system of China is highly developed. But china has experienced a slow economic growth in the 1st quarter of 2015. The government is required to adopt adequate measures restricting the further fall in the growth rate of the economy. But despite of the slow economic growth, China is considered as one of the fastest growing economy of the world. The money...
6 Pages(1500 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 Review Coursework for Rules for monetary policy questions for FREE!

Contact Us