Premium Essay

Money Train Eco285

In: Business and Management

Submitted By megan1osborne
Words 720
Pages 3
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:
Type your response here...1 Reserve Requirements help to maintain a stable banking system and ensure banks are able to conduct day-to-day check clearing and cash withdrawal transactions. These requirements are also policy tools that the Federal Reserve can use to control the money supply. The most important role is to provide structure and stability to the banking system. 2 My actions would affect growth by placing holds on money transactions such as holds and loans. It’s more important to increase economic growth as opposed to decreasing, ensuring lower unemployment levels. 3 When the economy remains at a constant level or declines, the ability to support the population fails. Economic growth relates to the size and quality of the economy. Growth is measured as the change in the GDP after subtracting inflation. 4 Using reserve requirements would require close monitoring on bank holds and money.

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:
Type your response here... 1 to slow down an economy,...

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