XECO 212 Money Train Multimedia Activity

XECO 212 Money Train Multimedia Activity - (1) Title: Money...

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(1) Title: Money Train Multimedia Activity Name: Jordan Miller Course: XECO 212 Due Date: Sunday, August 29, 2010 Instructor: Eugene Kaufman
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(2) 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 requirement is what the Federal Reserve uses as a tool to control liquidity in a free market. Whenever the reserve bank lowers its reserve requirements it will then be considered an
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expansionary monetary policy. The reason this happens is that this allows for more money to come into the banking system. With the higher requirement of the reserve, the less liquidity would be allowed. For that specific reason, the economy is able to get moving at a better pace again. The lower the reserve is set the more profit can be gained by a bank. This allows a bank
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This note was uploaded on 02/11/2011 for the course XECO 212 taught by Professor Cohen during the Fall '10 term at University of Phoenix.

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XECO 212 Money Train Multimedia Activity - (1) Title: Money...

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