What is the meaning of Money and how it performs? Please give the examples
Money is the term which is used to make the transactions and book the value of particular thing. It serves as a medium of exchange or medium to store value as unit of account. The main functions of money are to functions as medium of exchange to facilitate the transactions. It also works as medium of exchange to store the value earned by individual. In my personal experience, when I did achieve my targets in office I got rewarded by my teachers in monetary terms so that I could store the value I earned in materialistic way (Afonso, Baxa, & Slavík, 2018).
How do we measure the supply of the money and who could influence the liquidity created or reduce the US economy?
It is analyzed that creation of the liquidity capital depends upon the needs for the investment. In case of the recession, liquidity of the economy increases due to the high supply of the capital and in case of the normal market condition, the flow of the liquidity is stable. The market factors, monetary policies and investment options availability in the market influence the liquidity in the US economy. In addition to this, sometime high inflow and outflow of cash due to the foreign exchange transactions also impact the liquidity created in market (Peck, 2014).
What will happen if there is no one could control or manage the business cycle?
The business cycle reveals the ups and down of the economy throughout the time. This arises due to the ramified changes in the economic factors and domestic and international economic policies. If Federal Reserve Bank and authority fails to manage the business cycle then it might negatively impact the economic growth, foreign exchange reserve, and fiscal policies reserve. In addition to this, the main impact would be that economy of the USA might have to face recession if the business cycle is no controlled in given time manner (Cebula, 2014).
What role do you see for the Executive Branch of the U.S. government in managing the business cycle?
The branch (Executive Branch of USA) is responsible for managing and controlling the fiscal policies of USA. The utmost objective of this policy is to control and manage the inflation rate, purchasing power and national income of the country. The main role of the Executive Branch of the U.S. government in managing the business cycle is to manage the fiscal policies of the government. It requires using the fiscal policies of the economy
How does fiscal policy work? How does monetary policy work?
Fiscal policy manages the business cycle by using the fiscal policies of the economy. The. The main objective of the monetary polices is to control the inflation, unemployment rate and boosting the economic growth of the organization. Fiscal policies are used to control the flow of money supply in economy which will lower down the excess flow of capital and managing eh capital in the business cycle.
What are its limitations?
The main limitation of the fiscal policy work is that some time it requires changes in the economic and monetary policies which might be hard to implement due to the time range and short run using the monetary policy to counter recession (Cimadomo, 2016).
Who is responsible for setting and implementing monetary policy?
The Federal open market committee is indulged and responsible for determining and setting monetary policies in United States. It consists of the 7 members of the Federal Reserve Board of the Governor.
MyEconLab (MEL) Activity
MyEconLab (MEL) Activity Post of one of the student focuses on the assessment of the economic policies of the USA. It focuses on the analysing the economic growth. It also analyse the Changes in the national income and GDP of the economy. The principle of assessment allowed that student to audit and control the inherent and detention risk associated with the activity program.
Afonso, A., Baxa, J., & Slavík, M. (2018). Fiscal developments and financial stress: a threshold VAR analysis. Empirical Economics, 54(2), 395-423.
Cebula, R. J. (2014). The underground economy in the USA: preliminary new evidence on the impact of income tax rates (and other factors) on aggregate tax evasion 23(1) 1975-2008.
Cimadomo, J. (2016). Real?time data and fiscal policy analysis: A survey of the literature. Journal of economic Surveys, 30(2), 302-326.
Peck, J. (2014). Pushing austerity: state failure, municipal bankruptcy and the crises of fiscal federalism in the USA. Cambridge Journal of Regions, Economy and Society, 7(1), 17-44.