PART I: ESSAY
Directions: Please write a 1000-1500 word paper in which you address the questions below. Please format your paper according to APA guidelines (including a title page). Make sure to cite your references in a reference section. Please visit the Academic Resource Center for guidelines on using LIRN and APA format.
As part of its monetary policy to stimulate economic growth in the post-recession years of 2010-2011, the Fed engaged in a series of Quantitative Easing operations. Explain what Quantitative Easing means and how it is different from the other monetary policy tools. Why did the Fed have to resort to this tool, instead of one of its other tools? What are the potential long-term effects of Quantitative Easing on Inflation?
PART II: JOURNAL ACTIVITY
Web Field Trip
Directions: Please visit the following website:
Then answer the questions below. Please provide detailed and elaborate descriptions for each of the following terms and concepts. Your responses should be a minimum of 1 to 2 paragraphs and should include examples from the reading assignments or personal experience, if possible.
1. Current interest rates are reported in newspaper and the business press. Research consumer rates (home mortgage, auto loan rates, credit card rates) and important macroeconomic rates (federal funds rate, discount rate, prime rate.). Then define each interest rate and to explain why some interest rates follow the overall trend and why other interest rates do not.
2. Using the Federal Reserve website find the following topics and report your findings and why these figures are important to our economy:
Â· the current money supply
Â· trends in the money supply
Â· the most recent minutes of the FOMC
Â· the most recent change in policy by the Federal Reserve
Â· the current members of the Board of Governors and the FOMC