FIN 3501 FIN3501 Week 6 Individual Work 2 Securities (Everest University)

FIN 3501 Week 6 Individual Work 2 Securities (Everest University)

Questions 1-8:

1. What is the impact on GDP if consumer spending increases? Would the answer be different if the consumer spending was directed toward foreign goods?

2. What differentiates inflation and deflation? If both GDP and unemployment were simultaneously rising, would this period be classified as a recession?

3. What factors, besides the expected rate of inflation, may affect the rate of interest a borrower pays?

4. What is the Federal Reserve? What are its economic goals?

5.  How does the Fed pursue its economic goals? How may the tools of monetary policy affect securities prices?

6. What is the difference between the discount rate and the targeted federal funds rate?

7.  What are M1 and M2? How does the Fed alter M1 and M2?

8. Do the fundamental economic goals of fiscal policy differ from those of monetary policy? If the Federal Reserve finances the federal government’s deficit, what will happen to the supply of money?