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/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022
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W6: Objective of Monetary Policy
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Week 6 Discussion Post 6
What are the basic objectives of monetary policy? Comment on the cause-effect
chain through which monetary policy is made effective. What are the major
strengths of monetary policy?
Your initial discussion posts must be submitted by midnight, Day 3 and then your
responses to 2 of your classmates’ posts by have to be submitted by midnight,
Day 7.
All Threads
Week 6
Kayla Palmer posted Jan 11, 2023 10:55 PM Subscribe
Good evening class,
The basic objectives of Monetary Policy is to stimulate economic growth, full employment,
and price stability. The Fed can do this by their influence over interest rates, and through
the supply of money and credit. Monetary Policy is made effective through open-market
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operations, the reserve ratio, and the federal fund rate. Open-market operations consists
of government securities, or bonds, being bought. With bonds being bought this causes
the supply of money to increase, which then causes the demand for bonds to increase,
causing an increase in the prices of bonds, which then lowers the interest rates. The
reserve ratio the amount of money banks are required to keep essentially on hand. The
higher the ratio the less lending money they have to give out to their customers. The lower
the ratio the
more
lending money they have to lend out to consumers. The federal fund
rate is essentially the interest rate at which banks are charged when borrowing money
from the Fed or each other. By borrowing money at a low interest rate they can increase
their money reserve which they can lend out again increasing money flow. The strengths
associated with Monetary policy is that it can help create a more active and balanced
economy, it can reduce inflation, decrease unemployment and create stable prices.
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W6 Objective of Monetary Policy
Travis Tillman posted Jan 11, 2023 9:25 PM Subscribe
Hi Class,
The basic objectives of the monetary policy are promote goals of economic growth , full
employment, and price stability by influencing interest rates, the supply of money and
credit. According to the Federal Reserve “The Federal Reserve Act mandates that the
Federal Reserve conduct monetary policy to promote effectively the goals of maximum
employment, stable prices, and moderate long-term interest rates.” (Board of Governors
2021) In decided the best way to make adjustments to the policy over time the Federal
Open Market Committee takes into account a large amount of data. It takes the
prescriptions for the federal funds rate provided by policy rules. These rules have
limitations that goes against mechanically following any rule.
If you visit Monetary Policy Principles and Practice at federalreserve.gov they provide a
figure “The Transmission of Monetary Policy.” This figure breaks down the goals, monetary
policy, transmission channels, and effects. The goal is to dual mandate, which is maximum
employment, low and stable inflation. The monetary policy is too large for the federal
funds rate and communications. The transmission channels are overall financial conditions,
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like interest rates and asset prices. The effects spur or retrain growth in overall demand for
goods and services.
There are a number of major strengths of monetary policy. Some are they encourage high
levels of economic activity, a stable global economy, promote additional transparency,
promote lower inflation rates, creates financial independence from government policies,
implemented with relative ease and can boost exports.
Have a great day. Travis
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Martin week 6
Martin Pinedalopez posted Jan 11, 2023 8:56 PM Subscribe
Hello everyone,
I hope you all are having a great beginning to this new year; this week’s topic is to discuss
the primary objectives of monetary policy. This week I learned that the primary goals are to
control the available amount of money and manage how new money is created and
delivered to the economy. The government has placed into order a cause-effect chain that
helps monetary policy become effective. The cause-effect chain has three parts that help
make it effective: discount rate, reserve requirements, and open market operations. A
summary of these is the discount rate, which is an interest rate. The discount rate is the
interest rate that the Fed charges commercial banks for short-term loans. Open market
operation is how the Fed can affect the current interest rates. They can purchase certain
things like bonds in the free markets, which can directly affect lowering or raising the
current interest rate. The last thing I will be covering is the major strengths of monetary
policy. Its strengths are that it helps lower inflation rates, creates more access to liquidity if
needed, and helps the economy balance out. History repeats generally, and we have seen
these things down in the 2008 recession along with covid. The decision that the Fed makes
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directly impacts the economy. It can print more money, help with interest, and lend to
banks as a last resort.
– Martin
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Week 6 – Objective of Monetary Policy
Christopher Fowler posted Jan 11, 2023 4:23 PM
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Hello Classmates,
There are two major factors of monetary policy with three variables pairing within their dealings. These
types of policies are utilized also for the hope of growth and making goals to counter decline through
i l ti E i M t P li d l ith i i d ith F d l li
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Week 6 Discussion
Jonathan Malcolm posted Jan 11, 2023 1:44 PM
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Hello class!
The basic objectives of monetary policy is promoting the goals for growth of the economy,
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Collin Rhodes – Week 6
Collin Rhodes posted Jan 11, 2023 1:37 PM Subscribe
According to this week’s e-text, the primary objectives of monetary policy are to help
promote goals of economic growth, full employment, and price stability by influencing
interest rates, the supply of money, and credit.
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Week 6
Justin Shon posted Jan 11, 2023 2:02 AM
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Monetary policy is a policy implemented by central bank of a nation to control either
interest rate or money supply to reduce inflation and to maintain price stability. In the
U.S., Federal Reserve is responsible for monetary policy. The basic objectives of monetary
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Objective of Monetary Policy
Jack Daniels posted Jan 11, 2023 12:19 AM
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The basic objectives of monetary policy are “controlling inflation, managing
employment levels, and maintaining long-term interest rates”. (Amadeo, 2022) The
cause-effect chain can be simply stated as adding and subtracting liquid money to
financial institutions. This is done through monetary policy. Expansion or contraction
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Week 6 Perez
Ruben Perez posted Jan 11, 2023 12:14 AM
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Hello class,
Monetary Policy is a process that promotes the stabilization of prices and the economy.
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Week 6 Discussion
Trey Jarrell posted Jan 10, 2023 3:12 PM
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Last post Tue at 8:46 PM by
Bernard Vinson
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Good afternoon Professor Wu and Classmates,
When looking at monetary policy we see three major objectives that are followed. The first
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Week 6 Scaggs
David Scaggs Jr posted Jan 10, 2023 8:20 PM
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Last post Tue at 8:35 PM by
Bernard Vinson
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Good evening everyone,
What are the basic objectives of monetary policy? The definition of monetary policy is a
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W6: Discussion
Bessy Guevara posted Jan 10, 2023 12:05 PM
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Last post Tue at 8:19 PM by
Shaun Richardson
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Hello Dr. Wu and Classmates,
For this week’s discussion we need to explain the basic objectives of
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Week 6
Justin Brannon posted Jan 10, 2023 6:48 PM Subscribe
Good Evening Class,
The basic objectives of monetary policy is to control the overall money supply, promote
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Last post Tue at 8:17 PM by
Shaun Richardson
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Week 6
Shaun Richardson posted Jan 10, 2023 8:16 PM
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Good evening everyone,
There are multiple objectives when it comes to monetary supply. To first define it from the
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W6: Objective of Monetary Policy
Marcus Pegques posted Jan 10, 2023 3:59 PM
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Hello Everyone,
This week we are discussing “Monetary Policy.” The basic objectives of monetary policy are
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WK6 DB
Bernard Vinson posted Jan 8, 2023 4:14 PM
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Last post Tue at 3:08 PM by
thomas mize
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Hello Class,
The basic objectives of monetary policy may differ depending on the country’s economic
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Mize Week 6 Discussion Post
thomas mize posted Jan 10, 2023 3:04 PM
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Hello classmates, for this week’s discussion we are asked to discuss the
basic objectives of monetary policy, the cause-effect chain and the major
strengths of monetary policy. What is monetary policy, simply put, it is a
more
Week 6
Pryde Black posted Jan 10, 2023 1:39 PM
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Hello class and Professor.
This week we learned about monetary policy. It is to my understanding that by altering the
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Objective of Monetary Policy
Liza Escalante posted Jan 9, 2023 11:20 PM • 302 Words
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The following are the four most essential monetary policy objectives:
Reasonable Price Stability. The aim of price stability received much attention in the
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