Answer Part 2 Only. Part 2 is relevant with Part 1. Question: “The Economic Repo

Question

Answer Part 2 Only. Part 2 is relevant with Part 1.

Question:

“The Economic Report of the President” contains statistical information about the economy as well as the Council of Economic Advisers’ analysis of current policy issues. Find a recent copy of this annual report at the library or visit http://w3.access.gpo.gov/eop/ and read a chapter about an issue that interests you. Summarize the economic problem at hand and describe the council’s recommended policy.

Your assignment should look like an essay. Be sure to discuss, define and give examples highlighting if the policy is expansionary or contractionary and if and how monetary or fiscal policy is utilized.

Part 1 Answer: In recent years there was a movement called occupy wall street which clearly was a result of income inequality that is at its highest right now, Due to economic crisis in 2008 economy was shedding 800,000 jobs a month. This resulted in massive unemployment that sweeped across united states destroying hundreds of middle class families. The crisis since then has receded, but clearly underlying problem of inequality still exists till date. After financial crisis unemployment numbers were record high, Later on companies did not hire full time workers, they just went for temporary workers who were only paid part time wages. Unemployment receded, but more workers right now are under employed which would not show in unemployment index, This further increases poverty among ordinary people 1% problem : Income earned by 1% rich people is 20% right now, But the reality is that many jobs are outsourced or offshored. High skilled jobs still exist in US, but these job skills do not exist with people who were laid off from manufacturing sector.

Part 2

Who appoints the Chairman of the Federal Reserve? Why is it important for the members of the Board of Governors of the Federal Reserve to have longer terms in office than elected officials, like the President?

How do the expansionary and contractionary monetary policies affect the quantity of money?

What would make a country decide to change from a common currency, like the euro, back to its own currency?

Give some examples of changes in federal spending and taxes by the government that would be discretionary fiscal policy and some that would not

Explanation / Answer

1. under authjorityprovided by the banking act of 1935, the chairman of the federal reserve is selected by the President from the sitting Governors, which is also subjects too the confirmation of Senate.

3. expansiaonary fiscal policy increase the money supply and quantity of money is increased, where contractionary fiscal policy reduces the money supply and the quantity of money decreases.

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