money policy

money policy - Name: Bao Dang ID: 16-867-498 Current Major...

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Name: Bao Dang ID: 16-867-498 Current Major Central Banks Policies Facing similar challenges of fragile economic recoveries and surging commodities prices, the world major banks are charting different courses. The European Central Bank (ECB) is the first central bank among developed countries to raise interest rate since the recession in 2008. People’s Bank of China also increases its interest rate. The U.S. Federal Reserve (Fed), however, is carrying its easy monetary policies to keep interest rate near zero. Bank of Japan, shaken by natural disasters and nuclear crisis, also wants to keep low interest rates. Different actions of world major banks can be explained using economic knowledge. The world is facing two problems at the same time: (1) fragile economic recoveries and (2) surging commodities prices. With the downturn of the global economy, the aggregate demand in countries decreases by shifting to the left. The real output GDP decreases. In order to increase the aggregate demand and help the economy recovers, major banks want to keep low interest rate. With low interest
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This note was uploaded on 10/16/2011 for the course ECON 110 taught by Professor Vernon during the Fall '07 term at BYU.

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money policy - Name: Bao Dang ID: 16-867-498 Current Major...

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