Money Train

Money Train

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 reserve requirements that affect the economy are the lower the amount that the reserve charges bank will in return lower rates and allow banks to be able to lend easier to a person or persons.   By allowing credit to be obtained easier, it will allow the economy to slowly increase and come out of the recession.   It is important to increase economic growth, because the economy cannot survive in a recession or an area that is in a direct standstill.   I believe that the lowering the reserve requirements is the best option, because it allows the economy to start to turn around and come out of the recession. An economy that has come to a standstill or a recession will have to have an economic change or the economy will not be able to come out of the recession and thrive to its fullest potential.

Scenario 2
In 150 to 200 words, explain your reasoning for the way you are planning on using the Discount Rate. Be sure to address the following:

1. How the Discount Rate can affect the economy

2. How your action will affect economic growth

3. Why it is important to slow economic growth

4. Your rationale for the use of the Discount Rate

At the end of the game, you will be provided with this information to give to your instructor.

Answer:
The discount rate that I chose would be to increase the interest rates that the federal government charges the banks.   The best way to decrease a rapid economy is to reduce the spending, which in return will slow down the economy.   The banks will impose...

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