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THE ECONOMY. RHETORICAL ECONOMIC CYCLE Conceptualized by: Jermaine Harris THE ECONOMY.

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Presentation on theme: "THE ECONOMY. RHETORICAL ECONOMIC CYCLE Conceptualized by: Jermaine Harris THE ECONOMY."— Presentation transcript:

1 THE ECONOMY

2 RHETORICAL ECONOMIC CYCLE Conceptualized by: Jermaine Harris THE ECONOMY

3 RHETORICAL ECONOMIC CYCLE Un - Unemployment

4 RHETORICAL ECONOMIC CYCLE Un - Unemployment

5 RHETORICAL ECONOMIC CYCLE w - Wages Un - Unemployment

6 RHETORICAL ECONOMIC CYCLE w - Wages Un - Unemployment

7 RHETORICAL ECONOMIC CYCLE Y - Natl Income w - Wages Un - Unemployment

8 RHETORICAL ECONOMIC CYCLE Y - Natl Income w - Wages Un - Unemployment

9 RHETORICAL ECONOMIC CYCLE In - inflationY - Natl Income w - Wages Un - Unemployment

10 RHETORICAL ECONOMIC CYCLE In - inflationY - Natl Income w - Wages Un - Unemployment

11 RHETORICAL ECONOMIC CYCLE r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

12 RHETORICAL ECONOMIC CYCLE r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

13 RHETORICAL ECONOMIC CYCLE r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

14 RHETORICAL ECONOMIC CYCLE Un - Unemployment r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

15 RHETORICAL ECONOMIC CYCLE Un - Unemployment r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

16 RHETORICAL ECONOMIC CYCLE Un - Unemployment w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

17 RHETORICAL ECONOMIC CYCLE Un - Unemployment w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

18 RHETORICAL ECONOMIC CYCLE Un - Unemployment Y - Natl Income w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

19 RHETORICAL ECONOMIC CYCLE Un - Unemployment Y - Natl Income w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

20 RHETORICAL ECONOMIC CYCLE Un - Unemployment In - InflationY - Natl Income w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

21 RHETORICAL ECONOMIC CYCLE Un - Unemployment In - InflationY - Natl Income w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment

22 RHETORICAL ECONOMIC CYCLE Un - Unemployment In - InflationY - Natl Income w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment r - Interest rates

23 RHETORICAL ECONOMIC CYCLE Un - Unemployment In - InflationY - Natl Income w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment r - Interest rates

24 RHETORICAL ECONOMIC CYCLE Un - Unemployment In - InflationY - Natl Income w - Wages r - Interest rates In - inflationY - Natl Income w - Wages Un - Unemployment r - Interest rates

25 The Two Controlling Policies Monetary Policy - the process by which the Federal Reserve Bank (the central bank) controls the supply of money, the availability of money, and the cost of money (interest rates), in order to attain economic growth and stability Monetary Policy - the process by which the Federal Reserve Bank (the central bank) controls the supply of money, the availability of money, and the cost of money (interest rates), in order to attain economic growth and stability Fiscal Policy - the use of government spending and revenue collection to influence the economy Fiscal Policy - the use of government spending and revenue collection to influence the economy

26 Ben Bernanke Federal Reserve Board Chairman

27 How does the Fed control the supply of money?

28 The Federal Reserve Controls The Economy like a Mixing Board controls sound

29 The Federal Reserves job is to monitor the Economy by balancing a steady rate of Unemployment with a steady rate of Inflation. All while promoting steady economic growth. Too much Unemployment or high Inflation changes the soundness of our economy to a level that is dangerous or unacceptable. By adjusting the 4 knobs on the Mixing Board, the Fed attempts to maintain Economic soundness. The four mixing board knobs are 1 Reserve requirements 2Federal Funds Rate 3Discount Rate 4Open Market Committee Operations

30 The Lotto-Ball Distributor

31 C. By removing money from the economy the value of the dollar changes. Represents money in the system The Lotto-Ball Distributor D. Air pressure creates different levels of Velocity. Rate at which $ circulates in the economy. B. By putting money in the system the value of the dollar changes. A. The Reserve requirement is adjusted to change the level of money circulating in the system. The main purpose of this reserve is to make sure the banks have money on hand for withdrawal request. If they dont people may panic and create a run on the banks.

32 C. By removing money from the economy the value of the dollar changes. Represents money in the system The Lotto-Ball Distributor D. Air pressure creates different levels of Velocity. Rate at which $ circulates in the economy. B. By putting money in the system the value of the dollar changes. A. The Reserve requirement is adjusted to change the level of money circulating in the system. The main purpose of this reserve is to make sure the banks have money on hand for withdrawal request. If they dont people may panic and create a run on the banks.

33 C. By removing money from the economy the value of the dollar changes. Represents money in the system The Lotto-Ball Distributor D. Air pressure creates different levels of Velocity. Rate at which $ circulates in the economy. B. By putting money in the system the value of the dollar changes. A. The Reserve requirement is adjusted to change the level of money circulating in the system. The main purpose of this reserve is to make sure the banks have money on hand for withdrawal request. If they dont people may panic and create a run on the banks.

34 Teeter Tauter Inflation vs. Unemployment Inflation Unemployment

35 The Money Multiplier Every bank is required to hold 10% of all deposits in a cash reserve. Every bank is required to hold 10% of all deposits in a cash reserve. The reserves are to be available for withdrawals. The reserves are to be available for withdrawals. This is to prevent panic and a bank rush. This is to prevent panic and a bank rush. In the U.S., only about 3% of the total money supply consists of physical coins and paper money. In the U.S., only about 3% of the total money supply consists of physical coins and paper money. For Example: if the reserve requirement is 10%, for every $100 this creates a total of $1000 ($100 / 0.2) in deposits. For Example: if the reserve requirement is 10%, for every $100 this creates a total of $1000 ($100 / 0.2) in deposits.


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