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Problems, Policy, and The Fed

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Presentation on theme: "Problems, Policy, and The Fed"— Presentation transcript:

1 Problems, Policy, and The Fed
Unit 8: Economics 2 Problems, Policy, and The Fed

2 Economic Probs Economic Problems: Causes of the Probs: Inflation
Loss of wages for workers Lowered standard of living Unemployment Recession Causes of the Probs: Money Supply: too much $ in circulation / too many loans Gov’t Spending & Borrowing Productivity – amt that workers produce/hr Higher productivity can = better econ

3 Monetary & Fiscal Policy
Monetary policy – controls the $ supply; changes help to stabilize prices, employment & econ growth Controlled by the Federal Reserve “The Fed” Fiscal Policy – changes in govt spending or taxes to help stabilize & grow the econ Controlled by the federal govt

4 The Federal Reserve System
Called the Fed – set up 1913/14 Created to stop bank failures & regulate banks banks must keep certain amt of $ in reserve US divided into 12 federal districts w/ Federal Reserve bank in each Fed banks work only with govt & other banks

5 The Federal Reserve System
Purpose – govt banking & control nation’s $ supply 7-member board of governors in D.C. Appointed by president / approved by Senate Serves 14 years

6 Help the Economy Other ways to help the economy: Cut govt spending
Consumer saving Buy American-Made Increase productivity

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