Current Economics Essay - 1375 Words

Current Economics (Multiple Choice Questions Sample) Content: COVER PAGEA. Age Shall Not Weary Her 1 What did the Aldrich Commission recommend?I recommend that a large private association of banks that would issue its own currency to members facing runs be set 2 What was Woodrow Wilsonà ¢Ã¢â€š ¬s directive?Directed that the congress to rewrite the plan to reduce the influence of bankers at the 12 regional banks, making federal network and to add a board appointed by the president to oversee it. 3 At that point, what was the Fedà ¢Ã¢â€š ¬s mandate?Supply elastic currency when banks were short of cash, they could borrow from Fedà ¢Ã¢â€š ¬s discount window. 4 According to this article, why did the Fed fail during the Depression?It reverted to its original passivity, ceasing its open-market operations and permiting thousands of banks to fail. The real bill system retained its hold. It kept money tight, despite the collapse in prices and output when banks were not asking credit. 5 What were the key ingredients of the 1932 overha ul?Commercial and investment banks were separatedDeposit insurance introducedFed was given more stewardship of the economy 6 What is Congressà ¢Ã¢â€š ¬ dual mandate?Stable prices and full employment 7 How has the Fed contributed to its own strength? * Stretched authority by lending to investment banks, insurance company and issuers of commercial paper to contain a crisis that originated outside deposit taking banks. * It cut interest rates to zero and took monetary policy far into uncharted territory by buying bonds with newly printed money and committing to keep interest rates near zero for years to come. 8 What responsibilities has the Fed received from the President?Oversight of any financial institution judged systematically importantIncrease employment and create jobsB. The Bond Bears 9 How does inflation impact bond prices?Rising price reduces the buying power leading to lower bond prices. When inflation falls, the bond prices rise 10 What is Americaà ¢Ã¢â€š ¬s inflation ra te?1.3% For whom is debt a problem?The highly indebted economies What are the Goldilocks conditions of the 1990à ¢Ã¢â€š ¬s?A growth is high whenever the inflation remains positive What is the authorà ¢Ã¢â€š ¬s conclusion?There is a scope for a surpriseC. A Creeping AscentInterpret: Chart 1The economy grew steadily from January to December Chart 2Debt for US remained at 0.5$trillion from 2008 to 2010 and 0.7$ trillion in 2011 and 2012. For the rest of the world in 2008, it was 1.3$ trillion, then dropped to 0.9$ trillion in 2010, it rose to 1.0 in 2010 and remained same for 2011 and 2012 at 1.5$trillion Chart 3The debt deficient for each country dropped from 2009 to 2013 except for japan which rose in 2011 to 2012 Chart 4GDP remained the same in 2007 to 2008, dropped in 2009 and rose in 2010. It remained constant till 2013 except for US which rose Chart 5THE Employment rate was high for Germany, Britain, US, Ireland, Spain and lowest for Greece in 2007/2008 peak and in 2013. Chart 6There was rising fines since 2008 till 2013 Chart 7Loans reduced throughout for the US, from 4 to 3.5 in 2010-2013, for Britain it rose in 2010 and dropped in 2012 then rose in 2012 and dropped again by a smaller percentage in 2013. In the EURO area, it dropped in 2010, rose in 2011 and dropped. In mid 2012, it dropped again Chart 8Policy interest rate grew from 2007 to 2013 for Japan followed by Britain and lastly US. Chart 9The currencies against $ rose in January and dropped in march till august then rose till November and dropped again.D. Petty Impressive What was Pettyà ¢Ã¢â€š ¬s most important invention?Catamaran, it is a mechanical grain planter Describe how Petty defined "quantity theory of moneyà ¢Ã¢â€š ¬Ã‚ .The estimate of the amount of money required to maintain interest rate is derived by calculation of cash required in all transactions foe every year and how easily it can circulated. How does Pettyà ¢Ã¢â€š ¬s thought line up with Keynes?Keynes said that since use less work was better than none, those who are not employed could have been paid to construct a pyramid on Salisbury Plains, or transit Stonehenge to London. Why did Petty fall out of favor?He came up with theories first, then test these theories against their dataDid not look for all inclusive theory of the world since he lacked a model of joining all marketsE.2013: The Year Men Became Obsolete? What liberated women from daily drudgery?Many have found a formula for asserting power and authority in the workplace while still projecting sexual allure and glamour What percentage of college degrees were earned last year by women?57% bachelors degrees, 60% masters degrees, 52% doctorate degreesFrom 1980 à ¢Ã¢â€š ¬ 2012, what change occurred for: Labor force participation rate of men?It declined by 7.2% Labor force participation rate for women?62% points increase What types of jobs are overwhelmingly performed by men?Dirty, dangerous work of building roads, pouring concrete, laying bric ks, tarring roofs, hanging electric wires, excavating natural gas and sewage lines, cutting and clearing trees and buildozing the landscape.F. Financing the New Economy From the first story, the author gives three lessons. What are they? * Commercial banks are not at the center of funding the new economy * Federal government can still be a vital source of funding even when it is under attack in the tea party age. * We have working examples of the kinds of cooperative banking and financial institutions we need in order to scale up our vision of the new economy What percentage of United States profits does finance contribute?30% What does the Community Reinvestment Act do?Encouraged banks to invest in poor neighborhoods where they can accept deposits while vital is not clearly enough What structure is the most common type of cooperative?New windows cooperative How are credit unions different?They serve low income communities. They operate tight margins with tax exempt earnings and p ay scale far below those of the commercial banking sector. What is a correspondent bank?Banks which process payments, offer loans and invest to credit union members What is the movement in worker co-ops?To have the co-ops fund their own growth and build e...