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Use the Associated Press Website and do an article summary review about any article that relates to Principles of Microeconomics-Monopoly.
Suppose that the Federal Reserve lowers the required reserve ratio. What are the money multipliers for required reserve ratios of 0.15 and 0.20?
What are the required reserves on this new deposit? What is the largest loan that the bank can make on the basis? What are the excess reserves on the deposit?
Federal Funds Market What is the federal funds market? How does it help banks strike a balance between liquidity and profitability?
What is the difference between the federal funds rate and the discount rate? What is the ultimate impact on the money supply of an increase in discount rate?
What three tools can the Fed use to change the money supply? Which tool is used most frequently? What are three limitations on the money expansion process?
How can commercial banks create money? Is the government the only institution that can legally create money?
Is the same true of lowering the discount rate? What would happen if the Fed bought U.S. bonds from, or sold them to, the banking system?
Bank Deposits Explain the differences among checkable deposits, savings deposits, and time deposits.
Banks Are Financial Intermediaries In acting as financial intermediaries, what needs and desires of savers and borrowers must banks consider?
What portion of U.S. Federal Reserve notes circulate outside the United States? How does this affect the United States?
Though not discussed in the text, Fannie Mae and Freddie Mac played important roles in 2008 financial crisis. What does the Overview says about these agencies?
Incentive Problems and the Financial Crisis of 2008 What incentives motivated the behaviors that caused the financial crisis of 2008?
Case Study: The Hassle of Small Change. What are three possible solutions to the problem that the penny now costs more to produce than it's worth in exchange?
Bank Deregulation Some economists argue that deregulating the interest rates that could be paid on deposits. On what basis do they make such an argument?
What types of depository institutions are found in the United States? How do they act as intermediaries between savers and borrowers?
Fiat Money Most economists believe that the better fiat money serves as a store of value, the more acceptable it is. How could people lose faith in money?
Which would you supply as money and which would you supply for smoking? Under what conditions would you use both types of tobacco for money?
Why do you think rice was chosen to serve as money in medieval Japan? What would happen to the price level if there was particularly good rice harvest one year?
Why is universal acceptability such an important characteristic of money? What other characteristics can you think of that might be important to market particip
Global Economic Watch Go to the Global Economic Crisis Resource Center. Compare and contrast attitudes toward balanced national budgets.
Read the editorial In Defense of Debt. Why was the author not concerned about the high U.S. national debt?
What is the new level of gross national debt? What happens to the level of debt held by the public? What happens to the level of gross debt?
Explain why Robert Barro argues that if parents are concerned enough about the future welfare of their children, the effects of deficit spending?
In earlier chapters, we've seen that government can increase GDP in short run by running a budget deficit. What are some long-term effects of deficit spending?