¶ … Economy, Monetary Policy, and Monopolies
"The benchmark interest rate in the United States was last reported at 0.25%," (United States interest rates, 2012, Trading Economics). This is one of the lowest interest rates ever recorded in the history of the U.S. economy. It is a manifestation of the Fed's recent attempt to spur economic growth by encouraging consumers to borrow and spend more and to alleviate the pressures upon debt-ridden consumers, particularly those with adjustable rate mortgages. As a point of comparison, the interest rate in April 2007 was 4.963 (April, 2007, Treasury Direct).
current inflation rate is 2.30% while in 2007 it was 2.85% (Current inflation, 2012, Inflation Data). Although a lower inflation rate, in general, is better than a higher interest rate, this is keeping with the overall perception that the U.S. is in weaker economic shape than it was five years ago. Of course, as manifested in the 1970s, it is possible to have 'stagflation' or high interest rates and high unemployment, which the U.S. is fortunately not manifesting. Still, the U.S. unemployment rate currently stands at 8.1% (Economy at a glance, 2012, BLS). While this is an improvement over the statistics of 'the great recession' of 2008, in 2007 the unemployment rate was 4.6% (United States unemployment rate, 2012, Info Please).
Q2. One way to rapidly stimulate the economy is to free up the money of people who tend to spend a larger proportion of their income upon commodities rather than save their additional income. Poorer people tend to spend a larger proportion of their income on goods and services, and have greater immediate need for physical items, so giving more money back to poorer members of society via...
Economy, Monetary Policy and Monopolies The benchmark interest rate currently stands at 0.25% compared to 0.2500 that was registered in January 2011 (Trading economics, 2012). Meanwhile, the annual inflation has remained unchanged at 1.7% in June 2012. Inflation rate, here, means a general rise in prices measured against a standard level of purchasing power. GDP deflator and CPI are the most common measures of inflation. CPI measures consumer prices where as
" (ECB, 2007) Operational efficiency is held to be the most important of all the principles of operation for the ECB and can be defined as "the capacity of the operational framework to enable monetary policy decision to feed through as precisely and as fast as possible to short-term money market rates. These in turn, through the monetary policy transmission mechanism, affect the price level." (ECB, 2007) Equal treatment and harmonization
The deal was immediately criticized as anti-competitive by William Kennard, the chairman of the Federal Communications Commission, and by the Communications Workers of America, which represents some workers at both of the merged companies. But neither government regulators nor union bureaucrats will have the slightest impact on the latest merger. They have neither the power nor the desire to oppose the plans of the giant telecommunications monopolies. More substantial opposition
Federal Funds Rate The federal fund rate was part of the solution, comprised in the Federal Reserve Act of 1913, to centralize the banking system and gain public control of the money supply, inflation, and economic growth. The banking crisis of 1907 was a result of decentralized, unregulated banking that caused confusion with private bank notes being used as currency. There were occasional episodes of monetary mismanagement where the money supply
This also implies inadequacies in fiscal sustainability, which influences investments in private sectors. The second channel happens through the level, composition and quality involved within the public investment, which shows the level at which the public investment replaces the private investments (Schmidt- Hebbel, Serven, & Solimano, 1996). The final channel regards the level of taxation on the corporate earnings and the rules applicable in depreciations. There have been arguments that fiscal policy
Prevent Competitive Markets in the United States The United States follows a system of "free market economy" in which most businesses are privately owned and where individual producers and consumers determine the kinds of goods and services produced as well as the prices of such products. Competition is a key factor in market economies as it keeps the prices of products in check, forces the competitors to enhance the efficiency
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