Notes Template-2

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Arizona State University *

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Economics

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Apr 3, 2024

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MODULE NAME: Close Read: Monetary and Fiscal Policy Instructions: Reference the title of each Close Read page that you have in a week. In two to three sentences, summarize each Close Read’s information along with any additional info from the links. Also, be sure to define bolded words as you see fit. Reminder, you must have meaningful notes and not just a regurgitation of what you read. Page Title: What is Expansionary Monetary Policy? Page Title: Contractionary vs. Expansionary Monetary Policy Summary of Info: The monetary policy managed by a country's central bank aims to stabilize the economy by regulating the money supply, fostering price stability, and maintaining full employment output. This economic output is measured by real GDP, which accounts for the price level. Summary of Info: Expansionary monetary policy aims to stimulate the economy by increasing the money supply, while contractionary monetary policy seeks to slow down an overheated economy experiencing inflation. This is akin to the effect of breathing, where expansionary is like taking a deep breath to move forward, and contractionary is like exhaling to ease overheating. Page Title: Open Market Operations Page Title: Interest Rates Summary of Info: The expansionary monetary policy utilizes open market operations, where the central bank buys government securities from commercial banks to increase the money supply. This stimulates lending and spending, leading to higher demand, increased employment, and economic recovery. Summary of Info: Lowering interest rates during expansionary monetary policy encourages borrowing, spurring economic activity. For example, a restaurant owner may expand with a lower-interest loan, leading to increased spending and hiring, thus boosting the economy.
MODULE NAME: Close Read: Monetary and Fiscal Policy Instructions: Reference the title of each box and place your submission into the correct one. In two to three sentences, summarize each slide’s information along with any additional info from the links. Also, be sure to define bolded words and words in “”. Page Title: Discount Rate Page Title: Decrease in Unemployment Summary of Info: Central banks use the discount rate to influence borrowing among commercial banks. When the central bank lowers the discount rate, it becomes easier for banks to borrow money, boosting their ability to lend to the public. This stimulates consumption and economic activity, helping to increase the money supply and spur economic growth. Summary of Info: Expansionary monetary policy aims to reduce unemployment during a recessionary gap by increasing the money supply. As people spend more, firms must produce more goods, leading to increased hiring and a reduction in unemployment. Page Title: Fiscal Policy Page Title: What Is an Expansionary Fiscal Policy? Summary of Info: Fiscal policy is a key government tool for regulating the economy, addressing events like overinflation or depression. It involves government spending and taxation. Expansionary fiscal policies stimulate the economy, while contractionary policies slow down excessive growth. Summary of Info: Expansionary fiscal policy aims to stimulate economic activity by increasing aggregate demand to close a recessionary gap. This is achieved through increased government spending and/or decreased taxes, which boosts disposable income, leading to higher consumption and GDP growth. However, it can also contribute to inflation.
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