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Economics help please?

Unemployment Insurance and Employment Discussion

Economics help please?

Postby amaury » Sat Jan 26, 2013 3:38 pm

(1) Money-As more people use debit cards and credit cards and it becomes more expensive to print money--many are advocating that we get rid of hard currency and simply use cards to transfer value. Currently, government transfers such as welfare and unemployment insurance are based on debit-card disbursements. What are the advantages of such as system? What are the disadvantages? Would you prefer us to go this route in the future? Why or why not?

(2) Explain how the Federal Reserve uses each of the three tools at its disposal (reserve requirement, discount rate, and federal funds rate to control the money supply and monitor the economy.

(3) The Federal Reserve was set-up to be a non-political entity that cannot be influenced by Presidents, Congress, or state governments. Consequently, the members serve 14-year terms and the Fed's chairmen's term overlaps with that of the U.S. President. Considering that different parties have different economic views, and the need for government to be on the same page in an economic crises at times, should the U.S. continue this term structure of the Fed, or should every new president be allowed to bring in their own Fed approved by Congress? Defend your answer. Include at least two positive effects of your position and two negative effects of the opposite position.
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Economics help please?

Postby brynn77 » Sat Jan 26, 2013 3:40 pm

I wouldn't want America to become fully dependent on online banking and online money transactions because already we print vasts amounts of money which causes inflation so we can pay our debts. So if we became dependent on online currencies, it would become even more reliable for us to simply add money to our reserves. Basically I wouldn't trust our country with the ability of making money out of thin air that easily.

Not sure on question 2, but I know the federal reserve gives loans/money to many individual banks with small interest rates. Then the individual banks loan money to individual people with higher interest rates.

I think there should be a new Fed every election because it would bring in more innovative thinking and would get rid of old conservatives. However new members could be less experienced on how to run the country's reserve efficiently and if to many conservatives are gone, a reign of liberals can come to power and spend more money than we do right now, which would cause more debt.
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