...Running Head: Assignment: Money Train Multimedia Activity Assignment: Money Train Multimedia Activity XECO/212 University of Phoenix Reserve Requirements 1. To increase growth, the Federal Reserve should lower reserve requirements. When reserve requirements are lowered, it means that banks are required to keep fewer funds in their reserves. As such, they will have more funds to loan, this will increase money supply. When supply of money increases, there will be a decrease in interest rates. When interest rate falls, investors and consumers will be more willing and able to borrow funds to invest and consume since it is now cheaper to borrow funds. When consumption and investments increase, it will increase aggregate demand and thus bring about economic growth. Economic growth is important to maintain or improve standard of living. In addition, economic growth helps to close recessionary gaps and thus reduces unemployment rates and increase level of income. On the other hand, when reserve requirements are increased, supply of money will fall. This will result in an increase in interest rates which will contribute to a decline in economic growth. Discount Rates 2. To slow down an economy, the Federal Reserve should increase discount rate. This makes it more expensive to borrow funds. As such, banks will have fewer funds available. When this happens, supply of money will decrease and this will result in an increase in interest rates. With the increase in...
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...Title of Paper: Assignment: Money Train Multimedia Activity Student Name: Daniel Gurley Course/Number: XECO/212 ECONOMIC THEORY Due Date (MM/DD/YYYY): 06/24/2012 Instructor Name: Jaime Medina Scenario 1 In 150 to 200 words, explain your reasoning for the way you are planning on using Reserve Requirements. Be sure to address the following: 1. How Reserve Requirements affect the economy 2. How your action will affect economic growth 3. Why it is important to increase economic growth 4. Your rationale for the use of Reserve Requirements At the end of the game, you will be provided with this information to give to your instructor. Answer: The action that I selected was to lower the reserve requirement. Lowering the reserve requirements allows the bank to free more funds for lending. This action also reduced the amount of money that the banks were required to keep in their reserves. This increased the money supply that is available for use to the economy and lowered the interest rate for consumers. This action will assist the economy by providing more relaxed funding for all consumers and will aid in sparking economic growth. With more money available and easier funding by the banks, consumers are able to spend as needed. In this case, both businesses and consumers thrive economically. Increasing the reserve would reverse would have a negative effect on the economy and would take money away from consumers and businesses and could lead to an economic downturn. Effective...
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...1 Supply and Demand XECO/212 April 22, 2012 2 Supply and Demand The area where I have the most experience in is in the car industry. I am a 35 year old man and I am fortunate that I have had many opportunities to buy cars in my lifetime. I have haggled many prices, enjoyed low interest rates, low payments as well as enjoyed different kinds of cars since I was 18 years old. I have also been on a short end of a deal where I bought a stolen car from a private owner that posted it in a car magazine for sale, long story short, I lost the car and the money I paid for it. So, I believe that I have a lot of experience in this area. Now, the car industry for years was booming before the tragic events of 9-11 and because of these events, prices in gas began to rise dramatically. This is one factor that causes a crucial hit to supply and demand. At one point, the Ford Expedition and Ford Explorer were the top selling automobiles because they were affordable, safe, and over all a nice car. Families could enjoy trips to grandma's house or a theme park with no hassle at all. When gas rises because of a war in the Middle East, we pay for it here at the pump. Gas prices in the United States were around $2. 50 to $3.00 before the events of 9-11. In some places they have soared to $5.00 dollars and have gone as high as $6.00. This effects every hard working person in the United States. Because this effects many people here at home, people may not...
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...Supply and Demand Paper Monique Clement XECO/212 Frederick Runge When you are thinking about buying a new car there are some many things to think about including supply and demand. Understanding how supply and demand works can help you when it comes to purchasing a new car. You have to think about what make, model and year because those things will help you with elasticity and complements. The demand for a Bugatti is extremely low because this vehicle is unaffordable for most but the supply would be high because they only make a certain number of these cars per year and if you have the money you may want to sport this very fabulous vehicle. A non-price factor that causes possible change supply and demand would be safety. Safety is a big concern to me when I am going to purchase a new car. I am looking for a great safety rating because I need a car that will protect me and children in case of an accident. Safety should be key for everyone when they are thinking about purchasing a new car. I like to do my research before stepping into a dealership. I also have to consider would safety be better on an SUV or car. Research is key to getting a safe vehicle. I remember when Kia car came out the safety rating was horrible. The cars were made cheap and it definitely showed. From 1997 to 2001 the Kia vehicles had a lot of engine and transmission problems so there was no demand for those vehicles because no one wanted to invest in a vehicle that would bring them problems...
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