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Federal Reserve System is an independent agency of the United States government that helps oversee the nation's banking system. The Federal Reserve System is known as the central bank of the United States. Its most important job is to assist the U.S. government in managing the economy by encouraging economic growth and controlling inflation. It pursues these goals by influencing interest rates and, the availability of money and loans. The program the Fed follows in influencing interest rates is called its monetary policy. The Fed also performs many financial services for the federal government and provides numerous services to commercial banks.History: Congress established the Fed in 1913
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) because higher bank costs lead to higher borrowing costs for consumers and companies, which in turn slows spending. Additionally, a trickle down effect occurs on mortgage rates because banks must raise mortgage rates to cover their costs. Higher mortgage rates eventually dampen housing demand, which eventually reduces economic growth.When the economy is growing faster than the Fed deems to be sustainable, the Federal Reserve is inclined to raise interest rates to slow the rate of growth and prevent inflation from accelerating. A quickly growing economy can lead to rapidly rising wages and salaries, which increases the cost of goods and, therefore, leads to inflation.REFERENCES:BEA, U.S. Department of Commerce, National Economics Accounts "News Release: Gross Domestic Product, Third Quarter 2004" October 29, 2004, Volume BEA 04-48.
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superannuation funds." (Henry, 2017) This number gives an idea of the amount of everyday working Australians that would be affected by the bank tax and thus, it should not be implemented due to the great negative impact it would have on many Australians.
A major concern with this tax is that to spare shareholders, banks may pass on the new costs to customers. Again many everyday Australians may take a massive hit at the introduction of this tax. The big banks can simply pass on the cost to their customers by either raising the interest rates they charge borrowers or lowering the interest they pay depositors. This will hit every day, working Australians the most as the country has one of the
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Gregory 1Keera GregoryDennis DunkinEng 1227 May 2014Has the Federal Reserve Outlived Its Purpose?With the everyday fluctuation of interest rates and the continuous downward spiral of the value of the United States dollar, it's not uncommon to wonder what elements contribute to these constant changes. When the government is in debt and they want to send millions of dollars to Syria, does a guard just open up a vault and deliver the money? Who sits in that special office building evaluating the stock prices on Wall Street? Is it possible for America or any of its citizens to be debt free, or will they forever remain enslaved by the one thing that makes the world go round? All of these
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that many years ago, private lenders dominated both the student lending and home mortgage markets. This created obvious parallels between lending in these two spheres. Lenders overpriced for risk provided monies to borrowers who were not credit-worthy and had loan products with troubling features like sizable front-end fees, high default interest rates and aggressive debt collection practices (Rall).
In both markets, there was an embedded assumption: real estate values would continue to rise and well-paying employment opportunities would be plentiful for college graduates.
Then several things happened. The federal government took over the student loan market, cutting out the private lender as
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that interest rates on bonds and other alternative investments are. There is an inverse relationship between interest rates and investment. There is also an increase in money supply as interest rate decreases. That means that aggregate demand will increase because there will be more investments.
b. See attached.
3. Fiscal Policy and Monetary Policy
a. If the economy is in a recession, an expansionary fiscal policy would be utilized. Fiscal policy tools, actions by the congress, are much quicker than monetary tools, actions by the federal reserve bank. Additionally, they are used to close the recessionary gap by increasing the money supply of the economy in some way. The central bank can fight
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deductions encourage higher taxes and debt by state and local governments. By requiring higher federal marginal tax rates to replace lost revenue, the state and local tax deduction further severs the link between taxes paid and services received, forcing all federal taxpayers to pay, in part, for services provided to residents of other states. Moreover, the deduction on interest from state and local bonds distorts infrastructure spending decisions and makes it easier for states to accumulate debt, which could harm state economies and result in requests for federal bailouts.
Part II: Application and Critical Thinking (20 points)
7. Read each example of political communication related to a fictional
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proprietorship are:
· The sole proprietor has unlimited personal liability for the obligations of the business.
· Most non-taxable fringe benefits are severely limited or completely disallowed if they are for the benefit of the sole proprietor.
· The transfer of a portion of the ownership interest in a sole proprietorship requires a change to either a partnership or corporate form.
· The continuity of the business is not assured at the death of the owner.
· The sole proprietor is generally unable to raise a large amounts of capital.
4. The major disadvantage of a corporation are:
· Higher corporate tax rates – corporate tax rates may be higher than individual tax rates.
· Double taxation
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agents of their own choosing. The NRA gave the power of regulating interstate commerce to the President; this power was originally given to Congress. The NRA was effective in bringing America closer to socialism by giving the President unconstitutional powers. The US Supreme Court ruled that the NRA was unconstitutional in Schechter v. United States on the basis that code-drafting was unconstitutional.More programs of the New Deal were to follow suit such as the Farm Credit Administration; this dealt with the refinancing of farm mortgages at lower interest rates. The Federal Deposit Insurance Corporation was to guarantee bank deposits up to five thousand dollars. The Federal Securities Act
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economists (like Ben Bernanke) that this period of stability in economy can be mainly attributed to good luck but researchers at the European Central Bank and US Federal Reserve have rejected the claim and attribute it mainly to improved monetary policies. As a result of globalisation, in the early nineties, we saw the rise of China. The cheap labour and export-led growth model allowed it to benefit hugely from the rise in popularity in developed economies of outsourcing. Excess savings in developing countries like China led to an influx of capital into the United States, leading to a reduction in interest rates.
Role of Innovative and Complex Financial Instruments
With interest rates so low
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there.”
In May of 2010 the FCC which had been working on protections passes the first regulating rules to internet access. January of 2011 Verizon filed a lawsuit in Federal Court that has those regulations thrown out. In 2012 public interest groups threatened to file complaints to the FCC when AT&T blocked facetime for customers unless they subscribed to a different plan. AT&T agreed to unblock Facetime after millions of complaints. 2014 was the biggest year for the push for net neutrality and regulations. January, A Federal appeals court ruled that the internet is not classified as a telecommunication and therefore could not be regulated by the FCC. March CEO of Netflix Calls out ISPs on
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macroeconomic (countercyclical) policy that is utilised by the Australian government to achieve their economic objectives. This includes stabilising economic activity, influencing resource allocation and redistributing income, as well as reducing the level of inflation and unemployment within the economy. In this manner, fiscal policy is able to address areas of market failure, especially market instability, wherein there are severe fluctuations in the level of economic growth that distort economic decision-making, reduce consumers’ purchasing power, and force an increase in interest rates.
A QUOTE OR TWO
The main instrument used by the government in order to implement fiscal policy is the
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ideas. Churches continued to demand school not be permitted to teach evolution. Also, during this time entertainment became popular, movies, sports, miniature golf, and other hobbies or activities became very popular. Sports drew a great deal of money and the banks had to make sure they could handle the money coming into the bank. Many banks were opening and gave high interest rates that they could not meet. They started making loans easier to obtain and because of the changes and lose of jobs the barrower could not pay the money back so banks had to close their doors which caused many rushes on banks (Norton,2015).
Another cause of the Great depression was “Black Tuesday,” the stock market
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Canada's banks to open up new savings accountswith interest rates around two percent, just to keep their customers.There are also disadvantages of having only a few large banks. These banks can becomelarge "faceless corporations" who are unable to tailor their services to meet the specific needsof the communities that their branches are located in.As well, there are advantages of having independent banks with only a select number ofbranches. These banks can change their services to meet the needs of the customers in aspecific city or neighborhood. They may have to ensure that they offer exemplary service inorder to compete with the other small locally owned banks whom they are in
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.” (Morris, 1954). The initial concern that led to compulsory voting was the decline in turnout rates in the federal elections. During the 1919 elections there was a 71% drop in turnout rates, and then a further drop of less than 60% turnout in the 1922 elections. After compulsory voting was enforced in 1925, turnout rates increased to over 90%, making Australia the democracy with the highest voter turnout in the world. However, an argument was raised by Henry Abraham who stated:
It is difficult to see how we can remain faithful to the principles of democracy by compelling people to exercise an ostensible privilege, that of voting, contrary to their will. Since the ability to vote is a privilege
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, financial institution and on the personal wealth effect with the figures and charts to clarify and analyze the effects on the financial market.At last, the report provides few remedial actions to resolve the situation which caused by this financial crisis includes adopting tight fiscal policy, implementing low interest rates, conducting some microeconomic reforms and offering housing mortgage assistances to make sure that such disastrous crisis do not occur in the future again.Table of Contents11.0 Introduction 22.0 Globalization and Integration of Financial markets 22.1 Courses 22.2 Benefits 32.3 Negative influences 33.0 Financial Crisis 33.1 Introduction 43.2 Courses and Processes 44.0
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death penalty is flawed due to being subject to human error and bias. There have been numerous accounts of exonerations of death row inmates after being falsely accused.
Capital punishment is an outdated system that needs to be reevaluated in the 21st century. The death penalty dates back to the beginning of the United States, and we are currently the only Western country applying the death penalty. The United States has one of the highest execution rates in the world; from 2007 to 2011, our rates were comparable to Saudi Arabia, Yemen, North Korea, Iran, and China. These are not countries that one would expect the U. S. to be aligned with in terms of human rights measures. The eighth
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that potential victims might be armed.” (Martin,
2014, p. 10) In addition, these groups concern themselves with protecting their assets and
strongly believe that state law and the Second Amendment defend their right to do so. With that
being said, there is statistical evidence which supports the idea that firearms are in the best
interest of the people and that a trend in possession of firearms is equal to less crime. In Kates
and Moody, “Testing the more guns equals more murder thesis”, “The homicide rate for 2010
was roughly 32% lower than the rate in 1946. And year by year in the 2000’s, American murder
rates remained nearly the same or dropped—notwithstanding that each of these years saw
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(Source: ABS, 2019)
Question 4:
The Reserve Bank of Australia (RBA) is pursuing an expansionary monetary policy. RBA decreased its cash rate from 4.25% in 2011 to 1.5% in 2016, by conducting its open market operations (buy government bonds). The central bank still kept at 1.5% level until now due to uncertainty in the global economy (i.e. trade tension) (RBA, 2019).
Figure 9 Cash rates from 2011 to 2019
(Source: RBA, 2019)
This policy is considered suitable since the Australian economy is negatively influenced by the GFC and a slowing mining boom (RBA, 2019). This figure below illustrates that when cash rates decreased; money supply increased and lowered the interest rate. As cost of borrowing
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, 10.24 RMB for 1 EuroThis is an economy with much catching up to do. Continued rapid growth will be essential if poverty rates in China are to be reduced further. The challenge for the Chinese authorities is to ensure that growth rates are sustainable over a long period of time if they wish to continue reducing poverty rates in the country.But China is undergoing some major and sometimes painful restructuring, due to:- Larger gap between rich and poor- Large debts to pay off to several countriesAustralia.Australia has an enviable Western-style capitalist economy, with a per capita GDP on par with the four dominant West European economies.Since the recession in 1990-91, GDP has grown in
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