Money, Fiscal Policy, Monetary Policy, and Business Cycle Management

This assignment delves into the core concepts of money, fiscal policy, and monetary policy, exploring their functions and significance within the US economy. It begins by defining money and its roles, including its use as a medium of exchange and a store of value. The assignment then examin...Read More

MONEY; FISCAL POLICY
AND MONETARY POLICY

Table of Contents
What is the meaning of Money and how it performs? Please give the examples...................................3
How do we measure the supply of the money and who could influence the liquidity created or reduce
the US economy?...................................................................................................................................3
What will happen if there is no one could control or manage the business cycle?...............................3
What role do you see for the Executive Branch of the U.S. government in managing the business
cycle?....................................................................................................................................................3
How does fiscal policy work? How does monetary policy work?.........................................................4
What are its limitations?........................................................................................................................4
Who is responsible for setting and implementing monetary policy?......................................................4
MyEconLab (MEL) Activity.................................................................................................................4
References.............................................................................................................................................5

What is the meaning of Money and how it performs? Please give the examples
Money is the term which is used to make the transactions and book the value of
particular thing. It serves as a medium of exchange or medium to store value as unit of
account. The main functions of money are to functions as medium of exchange to facilitate
the transactions. It also works as medium of exchange to store the value earned by
individual. In my personal experience, when I did achieve my targets in office I got rewarded
by my teachers in monetary terms so that I could store the value I earned in materialistic way
(Afonso, Baxa, & Slavík, 2018).
How do we measure the supply of the money and who could influence the liquidity created
or reduce the US economy?
It is analyzed that creation of the liquidity capital depends upon the needs for the
investment. In case of the recession, liquidity of the economy increases due to the high
supply of the capital and in case of the normal market condition, the flow of the liquidity is
stable. The market factors, monetary policies and investment options availability in the
market influence the liquidity in the US economy. In addition to this, sometime high inflow
and outflow of cash due to the foreign exchange transactions also impact the liquidity
created in market (Peck, 2014).
What will happen if there is no one could control or manage the business
cycle?
The business cycle reveals the ups and down of the economy throughout the time.
This arises due to the ramified changes in the economic factors and domestic and
international economic policies. If Federal Reserve Bank and authority fails to manage the
business cycle then it might negatively impact the economic growth, foreign exchange
reserve, and fiscal policies reserve. In addition to this, the main impact would be that
economy of the USA might have to face recession if the business cycle is no controlled in
given time manner (Cebula, 2014).
What role do you see for the Executive Branch of the U.S. government in managing the
business cycle?

The branch (Executive Branch of USA) is responsible for managing and controlling
the fiscal policies of USA. The utmost objective of this policy is to control and manage the
inflation rate, purchasing power and national income of the country. The main role of the
Executive Branch of the U.S. government in managing the business cycle is to manage the
fiscal policies of the government. It requires using the fiscal policies of the economy
How does fiscal policy work? How does monetary policy work?
Fiscal policy manages the business cycle by using the fiscal policies of the economy.
The. The main objective of the monetary polices is to control the inflation, unemployment
rate and boosting the economic growth of the organization. Fiscal policies are used to control
the flow of money supply in economy which will lower down the excess flow of capital and
managing eh capital in the business cycle.
What are its limitations?
The main limitation of the fiscal policy work is that some time it requires changes in
the economic and monetary policies which might be hard to implement due to the time range
and short run using the monetary policy to counter recession (Cimadomo, 2016).
Who is responsible for setting and implementing monetary policy?
The Federal open market committee is indulged and responsible for determining and
setting monetary policies in United States. It consists of the 7 members of the Federal
Reserve Board of the Governor.
MyEconLab (MEL) Activity
MyEconLab (MEL) Activity Post of one of the student focuses on the assessment of
the economic policies of the USA. It focuses on the analysing the economic growth. It also
analyse the Changes in the national income and GDP of the economy. The principle of
assessment allowed that student to audit and control the inherent and detention risk
associated with the activity program.

References
Afonso, A., Baxa, J., & Slavík, M. (2018). Fiscal developments and financial stress: a
threshold VAR analysis. Empirical Economics, 54(2), 395-423.
Cebula, R. J. (2014). The underground economy in the USA: preliminary new evidence on
the impact of income tax rates (and other factors) on aggregate tax evasion 23(1)
1975-2008.
Cimadomo, J. (2016). Real‐time data and fiscal policy analysis: A survey of the
literature. Journal of economic Surveys, 30(2), 302-326.
Peck, J. (2014). Pushing austerity: state failure, municipal bankruptcy and the crises of fiscal
federalism in the USA. Cambridge Journal of Regions, Economy and Society, 7(1),
17-44.