1. The general public is not allowed to directly vote on the leaders of the Fede
ID: 1099167 • Letter: 1
Question
1. The general public is not allowed to directly vote on the leaders of the Federal Reserve Bank. This is done to keep the central bank insulated from political pressure. Is it the case that the Federal Reserve Bank officers are free from political pressure? Your answer should be two to three sentences long.
2. How can the Federal Reserve respond to a decline in the Solow growth curve from 3% to 1%? Your answer should be two to three sentences long.
3. Medicare spending takes up about 13% of federal spending, so why are many analysts so concerned about Medicare as it exists today? Your answer should be two to three sentences long.
Explanation / Answer
1)No,It is not keeping the bank insulated from political pressure as political pressure comes from the politicians in government.They will use the central bank for their business purposes which is not related to voting by public on leaders of central bank.So fort effective economy, federal reserve officers must be made autonomous so that they are insulated from political pressure
2)If Solow growth curve from 3% to 1%, then federal reserve respond that economy reached matured state. So further growth caused negative growth.hence policies adopted should be in favour of stable economy instead of growing economy. stable indicates low inflation and stable growth rate.So by these policies economy will prosper.
3)As Medicare spending takes up about 13% of federal spending and now as government is runnning in deficit, So 13% have huge impact on budget.As deficit in goverment is increasing year by year, So anaylysts feel that medicare spending must be reduced as medicare spending was high from previous years,so it helped in the economy to cover all basic medicare problems, So now it can be reduced.
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