Using the Ten Principles to Analyze a Challenging Economic Issue

Week 9 Assignment: Using the Ten Principles to Analyze a Challenging Economic Issue

Throughout the course, you have been provided with videos and articles in This Week in Business News. Pick one of these articles/videos which deals with an economic challenge that interests you. It should be an article/video from which you learned the most, from which you got an insight that changed your mind, or with which you disagree.

Prepare a paper on this article/video in which you explain why you chose it. What made this issue important to you?

Then identify which of the Ten Principles this article relies on. Does this article/video reject any or all of the Ten Principles?

In your analysis of the article/video and the Ten Principles, be sure to rely on at least two high-quality professional or academic articles on the same issue.

This paper must include:

Your introduction, summary and understanding of the initial article/video

A short discussion of your research and conclusions you were able to draw from it.

An explanation of what you learned and how you will use this new understanding.

Write a three to Four (3-4) page paper in which you:

Write an introduction for your paper explaining what the topic is, why the topic in the article/video is important to you, and why you think others should try to understand it.

Write at least one paragraph summarizing the key points made in the article/video.

Identify and explain how Mankiw’s 10 Principles are foundational to the issues discussed in the article/video.

Find two other high-quality professional or academic quality articles on the same topic. Identify what these articles contribute to understanding the topic or issue and whether they agree, do not agree, or somewhat agree/disagree with the initial article.

Write a conclusion that explains what you learned about the topic and what conclusion you draw from your research on the topic.

Use at least two (2) quality resources in this assignment.

Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA formatting. Check with your professor for any additional instructions.

Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

Write a three to Four (3-4) page paper in which you: With Reference

Fiscal and Monetary Policy Learning ModuleNote: Focus on the first two (2) topics of the module.

Click here if you need help with the learning module(s)

Click here for audiofiles of the learning module presentations

Overview

The Fed­eral Re­serve Sys­tem, the cen­tral bank of the United States, is the reg­u­la­tory au­thor­ity for the do­mes­tic bank­ing in­dus­try and the na­tion’s money sup­ply. A board of gov­er­nors headed by a chair runs the Fed. The chair is also the pub­lic face of mon­e­tary pol­icy. The board over­sees the 12 re­gional head­quar­ters of the Fed. Mon­e­tary pol­icy comes from the Fed­eral Open Mar­ket Com­mit­tee (FOMC), which in­cludes the Fed chair, board of gov­er­nors, and re­gional lead­ers. The Fed sets mon­e­tary pol­icy through con­trol­ling the in­ter­est rate and the amount of money in cir­cu­la­tion. It de­ter­mines how much banks need to hold as re­serves, and it sets the in­ter­est rates banks pay to bor­row money. In times of cri­sis, the Fed can act quickly to im­ple­ment emer­gency or stop­gap mea­sures.The fed­eral bud­get in­cludes the an­nual ex­pen­di­tures and tax rev­enues of the U.S. gov­ern­ment. Each year the bud­get must be ap­proved by Con­gress and signed into law by the pres­i­dent. Two types of fis­cal pol­icy guide the bud­get: dis­cre­tionary, which is gen­er­ated by de­lib­er­ate Con­gres­sional ac­tion, and au­to­matic, which is in­flu­enced by the state of the econ­omy. The gov­ern­ment can use a va­ri­ety of fis­cal pol­icy ap­proaches to thwart re­ces­sion-re­lated mon­e­tary chal­lenges or to lessen in­fla­tion-re­lated chal­lenges. The stim­u­lus pack­age, known as the Amer­i­can Re­cov­ery and Rein­vest­ment Act, en­acted to counter the ef­fects of the fi­nan­cial cri­sis of 2008 is an ex­am­ple of such gov­ern­ment ac­tion.The Fed­eral Re­serve mon­i­tors eco­nomic con­di­tions in each of the 12 re­gions and uses the in­for­ma­tion it gath­ers to help set mon­e­tary pol­icy. It pub­lishes a va­ri­ety of analy­sis and data for banks, the gov­ern­ment, and the pub­lic through­out the year, and the Fed chair tes­ti­fies pe­ri­od­i­cally be­fore the House of Rep­re­sen­ta­tives’ Com­mit­tee on Fi­nan­cial Ser­vices.

Introduction

In the United States, the Fed­eral Re­serve Sys­tem sets mon­e­tary pol­icy by in­flu­enc­ing the in­ter­est rate and the amount of money in cir­cu­la­tion. It de­ter­mines how much banks need to hold as re­serves, and it sets the in­ter­est rates banks pay to bor­row money. In times of cri­sis, the Fed is able to act quickly and take mea­sures to stem the tide long enough for a more prac­ti­cal so­lu­tion to be pre­sented. De­pend­ing on the eco­nomic sit­u­a­tion, the Fed will take ac­tion that will ei­ther in­crease or de­crease the amount of avail­able money. One way it af­fects mon­e­tary pol­icy is to ei­ther buy or sell gov­ern­ment se­cu­ri­ties.

The federal budget comprises the annual expenditures and tax revenues of the U.S. government. The budget must be approved by Congress and signed into law by the president every year. There are two types of fiscal policy that guide the budget: discretionary,which is generated by deliberate Congressional action, and automatic, which is influenced by the state of the economy. The government can use different fiscal policy approaches to combat recession-related monetary challenges or to minimize inflation-related challenges.

The Federal Reserve monitors economic conditions on an ongoing basis in each of the 12 districts and uses the information it gathers to help set monetary policy. Eight times a year it publishes the Summary of Commentary on Current Economic Conditions, more commonly known as the Beige Book.Actual decisions are made by the Federal Open Market Committee(FOMC), which also provides reports on its views of the current state of the economy. The Fed provides a monetary policy report to Congress twice a year, and the Fed chair testifies before the House of Representatives’ Committee on Financial Services. The Fed may either tighten the money supply to fight inflation or ease the money supply to fight recession. Once the Fed decides to take action, it begins a chain reaction that affects various elements of the economy, including the real GDP.

Answer preview  Using the Ten Principles to Analyze a Challenging Economic Issue

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