SELECT THE MOST RECENT STATEMENT WHAT ACTION DID THE FED TAKE WITH RESPECT TO TH
ID: 1178337 • Letter: S
Question
SELECT THE MOST RECENT STATEMENT WHAT ACTION DID THE FED TAKE WITH RESPECT TO THE TARGET FED FUNDS RATE?
A.WHAT CAN YOU INFER ABOUT THE FED'S GOALS IN MAKING THIS DECISION?
MONETARY POLICY AND THE ECONOMIC OUTLOOK
A. WHAT WAS THE FED TRYING TO DO WITH ITS MONETARY POLICY DURING THE PAST TWO YEARS?
B. WHAT WAS THE ECONOMIC BASIS FOR THE FED'S POLICY ACTIONS?
C. WHAT IMPACT DID THE POLICY ACTIONS HAVE ON THE FED FUNDS RATE?
D. WHAT WERE THE FED'S CONCERNS FOR ECONOMIC GROWTH, HIGH UNEMPLOYMENT, PRICE STABILITY , INTERNATIONAL BALANCE.
Explanation / Answer
Normally the more efficient and richer the resources, the higher the level of national income
or GNP will be.
Land
Resources like coal, iron & timber are essential for heavy industries so that they must be
available and accessible. In other words, the geographical location of these natural resources
affect the level of GNP.
Capital
Capital is greatly determined by investment. Investment in turn depends on other factors like
profitability, political stability etc.
Labour & Entrepreneur
The quality or productivity of human resources is more important than quantity.
Manpower planning and education affect the productivity and production capacity of an
economy.
2. Technology
This factor is more important for nations with little natural resources. The development in technology is affected by the level of invention and innovation on production.
3. Government
Government can help to provide a favourable business environment for investment. It
provides laws and order, regulations that affect exchanges. In HK, the government promotes
free trade and competition which encourage economic activities.
4. Political Stability
A stable economic and political system helps the allocation of resources. Wars, strikes and
social unrests will discourage investment and business activities
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