Money Train Week 6 - Scenario 1 In 150 to 200 words,...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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. ..In choosing Reserve Requirements as appropriate action to increase economic growth, the current state or standard of living of consumers has to be examined and statistics should point to a need for increases in economic growth. The Federal Reserve and its role in the attempts to increase economic growth should lower reserve requirements. This will allow for banks to have more money and the increased money supply will cause a fall of interest rates. When interest rates are decreased, the public; consumers and investors, will have more opportunities and desire to borrow money from banks and therefore be more active in investing and consumption of goods and services. Lower interest rates make borrowing less expensive and with the growth in consumer and investor activity, the growth in economic growth will cause an increase ini aggregate demand. All these factors and actions are vital to
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/21/2010 for the course ECO 212 AACL0RVXH3 taught by Professor Shivers during the Spring '10 term at University of Phoenix.

Page1 / 3

Money Train Week 6 - Scenario 1 In 150 to 200 words,...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online