Final milestone for econ 202 5 slides on decade 1980-89
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ECO202FinalProjectMilestoneThree.pptxMonetary policy
Ryan Green
ECO 202
Professor Lauterborn
ECO 202
Choose a title for your presentation.
Include your name, the course name and the assignment name.
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Monetary Policy
From late 2015 to mid 2018, the Federal Open Market Committee (FOMC) increased the target of federal funding in order to increase price stability and increase employment.
The effects of the decision was reflected in a strengthened labor market and a lowered inflation rate. The inflation rate was close to the 2% rate that was targeted in the long run.
The policy was meant to inject more money into the economy by allowing more people to start and grow their businesses.
The policy was seen as a way to increase access to funds by all. The banks set a lower interest rates, which made it easier to access funds for business use.
ECO 202
Monetary policies are meant to ease tough economic situations, stimulate growth and reduce inflation. To increase price stability, FOMC decided to inject more money into the economy(Foresti, 2017, p. 225) . This came as a relief since the dollar was strained due to increase in its demand and shortage in supply. Such policies help to boost the economy and avoid increase in price of items against a stagnant currency. Increased liquidity helps to improve the money supply in the economy.
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Monetary Policy Actions
Federal Open Market Committee (FOMC) is approaching the issue patiently.
The committee will review the impact of the model on the economy.
Availing more funds meant increase in businesses being done by people.
The lowered interest rates lead to a higher uptake of loans.
As a result, more people expand their businesses and this reduces unemployment in the country.
The manipulation of money supply must help to ease the economic situation by creating more cash flow in the economy.
ECO 202
FOMC is tasked with ensuring that policies are carried out. With increased money supply into the economy, businesses will benefit from the money. in addition to that, the committee ensures that the action is regulated. The improved cash flow helps to remove the strain on the cash that is available in the economy (Cobham, 2015, p. 3) . With these policies, the economy can be rejuvenated even under the most difficult of circumstances.
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Monetary Policy Impact
The policies made a positive impact on the businesses and general growth rate.
It was observed that the following effects were felt by the businesses:
1. Improved growth rate due to accessible funding.
2.Lower rates of unemployment due to increased business capital that encourage startups.
3. Lower inflation rates.
4. There is improved GDP across all sectors of the economy.
ECO 202
The impact of the policies are always felt over time. injecting cash into the economy helps to stabilize inflation and improve employment rates. If businesses can carry out their expansion activities confidently, then there will be job creation. This will increase the output across all sectors of the economy. With these policies, economic growth is bound to be realized easily. The aim of any policy is to stimulate economic growth by helping both small and big business expand and venture into new territories.
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References
Cobham, D. (2015). Monetary Analysis and Monetary Policy Frameworks: Introduction. The Manchester School, 83, 1-4. doi:10.1111/manc.12105
Foresti, P. (2017). MONETARY AND FISCAL POLICIES INTERACTION IN MONETARY UNIONS. Journal of Economic Surveys, 32(1), 226-248. doi:10.1111/joes.12194
ECO 202
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