THE ECONOMY.

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Presentation transcript:

THE ECONOMY

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

RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE w - Wages RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE w - Wages RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income w - Wages RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income w - Wages RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Contracting economy Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages Y - Nat’l Income

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages Y - Nat’l Income

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages In - Inflation Y - Nat’l Income

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages In - Inflation Y - Nat’l Income

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages r - Interest rates In - Inflation Y - Nat’l Income

RHETORICAL ECONOMIC CYCLE Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages r - Interest rates In - Inflation Y - Nat’l Income

RHETORICAL ECONOMIC CYCLE Contracting economy Y - Nat’l Income In - inflation w - Wages r - Interest rates RHETORICAL ECONOMIC CYCLE Un - Unemployment Un - Unemployment w - Wages r - Interest rates In - Inflation Expanding economy Y - Nat’l Income

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 Fiscal Policy - the use of government spending and revenue collection to influence the economy

Ben Bernanke Federal Reserve Board Chairman

How does the Fed control the supply of money?

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

4 Open Market Committee Operations The Federal Reserve’s 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 2 Federal Funds Rate 3 Discount Rate 4 Open Market Committee Operations

The Lotto-Ball Distributor

The Lotto-Ball Distributor Represents money in the system 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 don’t people may panic and create a run on the banks. C. By removing money from the economy the value of the dollar changes.

The Lotto-Ball Distributor Represents money in the system 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 don’t people may panic and create a run on the banks. C. By removing money from the economy the value of the dollar changes.

The Lotto-Ball Distributor Represents money in the system 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 don’t people may panic and create a run on the banks. C. By removing money from the economy the value of the dollar changes.

Teeter Tauter Inflation vs. Unemployment

The Money Multiplier Every bank is required to hold 10% of all deposits in a cash reserve. The reserves are to be available for withdrawals. 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. For Example: if the reserve requirement is 10%, for every $100 this creates a total of $1000 ($100 / 0.2) in deposits.