Sample Essay on:
Altering Monetary Policy

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Essay / Research Paper Abstract

A 5 page paper discussing a given set of hypothetical economic conditions, analyzing the conditions individually and in the presence of other, related indicators. The Federal Reserve’s action should be to reduce interest rates to encourage business expansion and consumer spending. As spending increases, GDP growth rate will increase as well, as will demand for consumer goods and services. Businesses will need to produce more of each, and likely will need to hire additional workers. If these have been out of the labor force for some time they will increase personal spending too, contributing to greater growth of GDP. Regardless of where interest rates are, the government needs to control its own spending. Bibliography lists 3 source.

Page Count:

5 pages (~225 words per page)

File: CC6_KSeconMonPol.rtf

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Unformatted sample text from the term paper:

is operating under a series of constraints to which the Federal Reserve must respond. Following are the conditions that exist in the national eye, and implications of acting one way or another in light of those conditions. Conditions to Consider GDP growth is approximately 1.5%, and has been at approximately that level for two years This rate of growth would be disastrous in a developing nation in which per capita GDP is increasing but is still low. In the United States, a 1.5% increase in GDP represents a significant figure, in this case nearly $165 billion based on total GDP of $10.99 trillion (United States, 2004). Though acceptable and certainly preferred over no growth or even negative growth, 1.5% increase in GDP is not viewed as an admirable goal. The fact that growth in GDP has been at this rate for two years may indicate that the economy has found an equilibrium point that provides a 1.5% increase, or it may indicate that a decline is in the nations future. Because of the lag time involved in movements of an economy the size of that of the US, it is difficult to say which condition is presenting itself. It also could be poised to increase, were it not for the fact that unemployment has been drifting upward over the same time period. Increase in unemployment favors future decline rather than the notion that the economy is in equilibrium. Inflation ... has been at approximately 1-2% for the last two years That inflation has remained steady for two years at this low rate is a positive feature of the mix of conditions. Adam ...

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