Subject Area: Economics Topic: Deficit Spending Essential Question: Should the government use instruments of monetary and fiscal stimulus policies to reactivate the economy? Imagine people living in parks called Bushville’s, lines for soup kitchens that go for blocks, and all across the country kids running away from home travelling on trains searching for your next meal. This is just a taste of what 2009 could have been, but thankfully, the year did not go down this way although it will be remembered…

One of the most interesting facets of The Great Recession of 2008 is that it didn’t really begin in 2008. The fiscal and monetary policy that prompted what we know now as the Great Recession of 2008 really began in 2006 and 2007. What was happening then and why did it take so long for the nation to feel the recession? The answers to those questions explain a great deal about how the Federal Reserve Bank operates and how the different ideologies of economics affect our nation (Sumner, 2011). In…

How can monetary policy and fiscal policy greatly influence the US economy? Keynesian economics says, “A depressed economy is the result of inadequate spending .” According to Keynesian the government intervention can help a depressed economy through monetary policy and fiscal .The idea established by Keynes was that managing the economy is a government responsibility . Monetary policy uses changes in the quantity of money to alter interest rates, which in turn affect the level of overall spending…

Monetary policy rules are a fundamental part of the central bank models and are often refined to maximize economic welfare, specific to that country. Monetary policy rules are a methodical response of monetary policy events in the economy. Essentially, it can be thought of as a numeric equation, which determines the appropriate level for the central bank’s policy instrument to be a function of one or more economic variables that describe the state of the economy. It is imperative that economies…

Monetary policies Monetary policies are strategies used by the central bank, financial regulatory committee of currency board to regulate the amount of money supply in the economy. There are two types of monetary policies. These are expansionary monetary policies and contractionary monetary policies. Expansionary monetary policies entails increasing money supply in the economy. Expansionary monetary policies affect macroeconomic variables differently. It leads to reduction of unemployment,…

I. Introduction Monetary policy rules are a fundamental part of the central bank models and are often refined to maximize economic welfare, specific to that country. Monetary policy rules are a methodical response of monetary policy events in the economy. Essentially, it can be thought of as a numeric equation, which determines the appropriate level for the central bank’s policy instrument to be a function of one or more economic variables that describe the state of the economy. It is imperative…

During these hard times, people are facing one of toughest job markets in our nation’s history. Even though the media says economic recovery is imminent, many are still wondering when they will see the light at the end of the tunnel. The Federal Reserve Bank or FED is already being asked to prepare an “exit strategy” due to the concern that the expansionary monetary policy they used will quickly turn the recession into high inflation. This “exit strategy” can also be described as contractionary monetary…

The 2008 Great Recession has been declared by the International Monetary Fund (IMF) as the worst global recession of the 20th century since the Great Depression [1]. After eight years, global economies today continue to struggle to find sustainable recovery and robust growth. The crisis was a massive institutional failure that involved the bursting of the asset bubble, the collapse of the stock market, and the moribund employment rate among others. The crisis has since triggered economists, governments…

2008 Recession in America “It is not about how hard you fall, but how you get up and keep going.” Economic recession may be a natural phenomenon in the world’s economies. Every market has its peaks and falls, definitely the United States of America has hers. In 2008, USA experienced another tragic downfall when her market went down and unemployment rate charged up. Millions of workers lost their jobs; from the young, the old, the whites, Asians, Latinos, both men and women. Distress filled every…

Monetary Policy During The Great Depression One of the most important aspects of the Great Depression that stands out in economists’ minds is the surge of bank panics and failures during the depression’s onset (1930-1933). However, an institution created with the intention of preventing such a string of disasters failed to fulfill its obligation as a “lender of last resort.” This is the Fed, and its failure to prevent the early bank panics of the Great Depression is a very interesting economic…