Say It in 250 Words

Econ 545 Sample 250 Word Essay

Selling bonds reduces the money supply, thus increasing the value of money, but the reserve is not changed if banks buy bonds, says Patricia and Allison, but is not good monetary policy for the Feds to raise the reserve requirement, due to its tendency to increase inflation more than desired. Allison's suggestion to raise interest rates is useful for selling bonds. Decreasing government spending as suggested by Kathy may lead to a deeper recession. If the government increases their spending as Allison recommends, this will raise aggregate demand, enhance spending power, increase the value of money, drive up interest rates and inflation to normal levels, and create new job opportunities to meet new productivity levels. In other words,...