Assignment Problem: Monetary policies as instruments to promote economic growth
Instructions:
Read the following premise carefully and answer the questions specifically and in detail. Keep in mind that, to obtain the total value that corresponds to each question, you must answer the request with the correct information, demonstrating that you understand and can properly apply the concepts studied. Try to address all elements of each question and always put the answers in your words.
Faced with instability of economic growth due to a recession or accelerated inflation, the Fed uses the open market operation to increase or decrease the available reserves of commercial banks, which, in turn, will affect the amount of money available in the economy. . In addition to open market operation, the Fed has other tools available to promote the growth, sustainability, and economic stability of a country. These tools have been used historically; an apt example was the 2008 mortgage debt crisis.
It explains in detail monetary policy, its role, and its effects on short- and long-term economic fluctuations. It uses the aggregate demand and supply model presented in the course.
Explain each of the tools that exist in expansionary monetary policy and contractionary monetary policy.
It expresses in detail the effects of monetary policy, expansionary and contractionary, on income and the price level.
Using the premise presented as a basis, it argues about the intervention of monetary policy as instruments to promote the growth, sustainability and economic stability of a country. (Provide an example in detail.)