When the Fed makes an open market purchase of government securities, the quantity of money will eventually decrease by a fraction of the initial change in the monetary base.” Is the previous statement correct or incorrect? Explain your answer.

Money, Money, Money

Submit a 4- to 5-page paper that addresses the following questions. Be sure to use references within the paper to support your answers.

Are credit cards or debit cards money? Explain your answer.

“When the Fed makes an open market purchase of government securities, the quantity of money will eventually decrease by a fraction of the initial change in the monetary base.” Is the previous statement correct or incorrect? Explain your answer.

Monetary policy is action taken by the Fed to influence the level of real GDP. Suppose the Fed wants to increase the money supply. What three tools could the Fed use to achieve this goal? Be specific in your answer and discuss the implications of this policy.

Assignment Expectations
Use concepts from the modular background readings as well as any good quality resources you can find. Cite all sources within the text and provide a reference list at the end of the paper.

Length: 4–5 pages double-spaced and typed in 12-point Times New Roman font.

The following items will be assessed in particular:

Your ability to understand an application of monetary policy.

Some in-text references to the modular background material. APA formatting is recommended. Use this site from the Purdue Owl if you need help with APA: https://tinyurl.com/3rnc5vt.

The essay should address each element of the assignment. Remember to support your answers with solid references, including the Case readings:
Module 4 – Background
MONEY, MONEY, MONEY
This module examines the important role of money in the economy. It is important to understand how money is defined. We will also analyze banks and other financial intermediaries that impact the creation of money. The Federal Reserve (the central bank) and how it controls the money supply is explored.

Changes in the money supply have major impacts on inflation, output, and employment. We will conclude the discussion with an analysis of monetary policy. review the following background materials:

5 Stages of Evolution of Money, from Your Article Library

Use the “Tiny URL” to access the site: https://tinyurl.com/y9n6adgz

If the “TinyURL” is not working, here is the full URL:

5 Stages of Evolution of Money

The History of Money: From Barter to Banknotes, Investopedia 2015

Use the ‘TinyURL’ to access the site: https://tinyurl.com/d78f5uy

If this is not working, here is the full URL:
http://www.investopedia.com/articles/07/roots_of_money.asp

The Fed – Monetary Policy, by the Board of Governors of the Federal Reserve System. Read the paragraph under Monetary Policy and then click ‘Learn more’ and the page on Purposes & Functions. Click on the image for each of the seven areas to get more information about that specific topic.

Use the ‘TinyURL’ to access the site: https://tinyurl.com/ybjaojhr

If it is not working, here is the full URL:
https://www.federalreserve.gov/monetarypolicy.htm

Federal Reserve Tools and How They Work, from The Balance, 2016

Use the ‘TinyURL’ to access the site: https://tinyurl.com/y9sh8szj

If it is not working, here is the full URL:
https://www.thebalance.com/federal-reserve-tools-and-how-they-work-3306134\

What are the Effects of Inflation on the Economy? From the Balance, 2017

Use the ‘TinyURL’ to access the site: https://tinyurl.com/y99pb4pc

If it is not working, here is the full URL:
https://www.thebalance.com/what-are-the-effects-of-inflation-357607

Monetary Policy Tools: How They Work, US Economy, 2017

Use the ‘TinyURL’ to access the site: https://tinyurl.com/ya38jsbx

If it is not working, here is the full URL:
https://www.thebalance.com/monetary-policy-tools-how-they-work-3306129