Reserve requirements affect the amount of money in the banking system. My actions will increase the amount of money in the banking system. This means that banks can lend this money, which should increase the amount of economic activity. Under this scenario, increased growth will offset the negative impacts we are seeing. Reserve requirements are a good tool to use when the economy will benefit from increased investment. REDUCE RESERVE REQUIREMENTS
The discount rate impacts the cost of money. By increasing the cost of money, firms will undertake fewer investments. This will result in slowing the rate of economic growth. It is important to slow growth in order to head off inflation, which is a natural consequence of an overheated economy. In this situation, the discount rate will curtail investment, which is what has led to the economy overheating. INCREASE DISCOUNT RATE
BUY BONDS FROM…… [Read More]
Money Interest ates important individuals businesses making decisions finance purchases. The articles deal assessing conditions finance purchases important aspects policy. Allen, Bruce.
The high unemployment and inflation rates are some of the most important factors that threaten to affect the stability of the U.S. economy. As a consequence, the Federal eserve is forced to orient its strategy towards reducing the money supply. There are several methods and tools that the Federal eserve can use in order to reduce the money supply. For example, the Fed can sell government bonds. These securities are directed towards the public, like banks, financial institutions, and individual investors. In this case, this strategy is associated with increasing interest rates.
Another strategy used by the fed in reducing the money supply is represented by modifying the discount rates of banks borrowing from the Fed. This strategy also affects the federal funds rate that is…… [Read More]
There are two other things to consider. The first is that Fed policy can be assumed to be built into the markets. Prices in liquid markets are based on the best possible public information. Therefore, if I know about the pending change in the interest rates, that is public knowledge and will already be priced into the market rates. Any speculation I may have about interest rate changes is probably based on less information than what the market is already using, therefore my prediction has a lower likelihood of success; in case it is merely gambling to speculate.
The other consideration is that while changes in the interest rates may not impact the decision to purchase, they may impact the timing of the purchase. A house bought in 2006 when prices and rates were high would have been a much worse investment than the same house purchased in 2009 when…… [Read More]
They would basically argue:
"(1) Articles of daily use may be pawned, but the term for wearing apparel is limited to a year and that of weapons to two years
(2) the rate of interest must be within fifty per cent
(3) Those who do the business without sufficient funds shall be punished, and if they abscond, the liability must be borne by the people of the district" (Soyeda)
An interesting aspect of the early stages money lending in Japan is that the creditors would often require a guarantee. And this guarantee would be a certain good held by the debtor until the creditor paid back his debt. In other words, the mechanism was that of the modern day pawn shops. Future laws would be introduced to regulate the treatment of pawned items. In this order of ideas, in 1790, the Hundred Clauses clearly stated that pawned items could only…… [Read More]
The Federal Reserve can control the money supply through open market operations, changing the required reserve rate, the percentage of deposits that banks must maintain on reserve as cash deposits at the Federal Reserve banks, and by changing the discount rate, the rate of interest at which the Fed lends money to banks (Federal Reserve System). This paper describes how these tools can be used during times of too rapid growth and economic recession and recommends policy for our current economic situation.
To slow down an economy that is growing too quickly, the Federal Open Market Committee can sell securities of the Department of the Treasury on the open market to reduce bank reserves and raise the federal funds rate. Further, raising the required reserve ratio will mean that banks can't create as much money. And, by raising the discount rate, the Fed discourages banks from borrowing money…… [Read More]
" Thus, there is a contradiction between perceptions and appreciation of values as well. While the American society is based on more practical elements such as free trade, commerce and entrepreneurship, the immigrants bring with them a different set of values with more focus on personal relations and traditions. From this point-of-view, one could explain the discrepancy between the two sides and the subsequent separation, to the detriment of the minorities.
However, the tendency is quite obvious. Stoller expresses it from the very beginning, in the title of the book which represents the commercial creed of his character. "Money has no smell" indeed for the immigrants who are trying to adapt tot the conditions of the American society, "I sell my products to any person, Christian or Mulsmi, pastors or drug dealers, for if I am honest, money has no smell." (Stoller, 2002, p5) Thus, Issifi underlines the conviction in…… [Read More]
gov 2010). In recent years (with the exception of 2009, when the deficit was reduced considerably due to a massive slowdown in consumer spending in the United States), this deficit has risen dramatically, from over ten billion dollars in 1990 to well over two-hundred billion dollars ($200 billion) presently, and for much of the past decade (Export.gov 2010). The United States' trade with the European Union is less clear cut, as information is still reported by country rather than with the European collective community as a whole, but there appears to be more actual balance in the trade balance between the United States and the European Union, with trade deficits existent for many countries (particularly Germany, Italy, and Austria) and trade surpluses with others (notably the United Kingdom and Spain) (Exports.gov 2010). The deficits due to tend to outweigh the surpluses in dollar amounts over the twenty-year period, however, suggesting…… [Read More]
Money Multiplier: How it Works
The process of creating money begins with the Federal Reserve, which controls the amount of currency that enters the system (University of Rhode Island, 2004). The currency it supplies is called high-powered money, which is directly controlled by the Federal Reserve. However, this is not the money supply. The high-powered money is distributed to two places - the vaults of the banks as reserves, or the pockets of individuals and businesses as cash. ecause of the nature of the banking system, banks actually create the money. The cash held by the banks is called reserves and these reserves form the base for banks' expansion of checking accounts. When the currency held by the public is added to the deposit (checking) accounts created by the banks, the end result is the money supply.
Money Supply Process: Diagram 1.
SOURCE: University of Rhode Island. (2004). Money Supply:…… [Read More]
Money & Success
Serving in Florida
The author of this response is asked to respond to the question and dilemma posed in the "Serving in Florida" text and what the author of this paper thinks that Gail, Ellen and/or George could do to improve their material and economic well-being. The author will offer some suggestions as to what it takes to make it in the United States, especially for someone that is brought up in the working class as opposed to a person raised in suburbia or even amongst the rich. The author of this response holds that while it is theoretically possible to escape the curse of being broke while being in the working class, it is something that not everyone achieves and whether by choice or fate, people in the working class should be able to make a living wage.
Escaping Financial Hell
Many people bemoan the travails…… [Read More]
Money makes the mare go. Majority of the business today is conducted to multiply our wealth. Yet there are people working for noble cause too. The Non-Profit organizations or the non-government organizations are those working for the betterment of mankind and their purpose of existence is humanitarian work rather money making. While their objectives are different from organizations interested only in increasing revenues and income, these NPOs and NGOs however face same problems related to organizational structure, leadership, governance and ethical issues more or less as same level. This paper analyzes what specific legal, governance and ethical issues are faced by Save the Children International. The Save the Children is described by The Global Journal as one of the leading NGO in the world (Top 100 NGOs list, 2012).
Save the Children International
In 2012, the not for profit organization Save the Children was listed as 18th largest global NGO.…… [Read More]
Money and Politics - History
There has been massive debate on what Frank Baum's actual intentions were when he authored the famous 'Wizard of Oz' story tale. In the tale, Dorothy of Kansas traverses the land and the golden roads therein, in silver shoes. In so doing, she comes across a number of friendly and unfriendly, influential and powerless figures. At first, the tale was considered just that - a children's tale. However, deeper investigations revealed that the story was more than just a tale. Baum favored the Republican Party, and had made use of imagery to depict Kansas' negative political image which the rival Populists, who dominated the area then, had created. The images used in the tale, and the political aspects they have been interpreted to represent are listed below.
Dorothy's dull relatives: used to show the dull, unproductive, and uninhabitable nature of Kansas at the time, as…… [Read More]
China fixes the rate of its yuan to the dollar on a pegged float, where the float is minimal. This policy results in Chinese exports being underpriced, making them attractive in world markets (Dunaway, 2010). Two impacts of this policy are a strong export sector and a weak import sector, as foreign goods are very expensive in China. hile China's economy is growing rapidly, the currency policy also facilitates high rates of inflation (Batson & Back, 2010). This causes its own problems in the internal market, in particular given that country's high level of wealth disparity. In addition, this inflation will put pressure on the central government -- the peg to the dollar becomes more expensive to maintain, assuming that China increases interest rates in order to address the inflation.
Monetary and exchange rate policies are used to address issues such as the current account and inflation, but they also…… [Read More]
It could understood that in response to this the East European nations became progressively focused on their CMEA counterparts, to include in particular the U.S.S.., to buy manufactured goods that were not considered competitive in world markets.
Two methodological concerns have attempted to inform us about the geographical distribution. The initial issue deals with the approach devised by Hamilton and Winters and others which involved the estimation of a gravity model by applying data by means of a cross section of countries. The gravity approach propounded by Hamilton and Winters hypothesize that exports from a particular nation to other nation enhance the GDP of each nation. Exports decline with the rise of population of each nation and with the enhancement of distance between the two nations. The second approach was devised by Collins and odrik during 1991 to determine the long-run trading patterns of Eastern European nations that generate estimates…… [Read More]
She also learns the value of what she and Joe shared before Slemmons entered the picture. May and Joe "now know that the promises of the city and of the open road are often gilded and that, for the fulfillment of their dreams, they must fall back upon themselves" (Howard). Both learn the value of forgiveness as Joe works through the process of forgiveness.
The grass appears greener on the other side of the hill because sometimes our own interpretation skews our perspective. Things always look better from farther away and it is human nature to want more. However, May and Joe learn that more is not always better. Joe and May did not know the value of the happiness they shared when they were "poor." The truth is that in their poverty, they had what many people would give anything to have and that is real love. May and…… [Read More]
Money Game by Charles Green (2011)
Presidential candidate Herman Cain recently observed, "If you aren't rich, blame yourself!," a sentiment that is echoed time and again in Professor Green's authoritative text on personal money management, The Money Game. While it is reasonable to suggest that many if not most people will never become rich, it is also reasonable to suggest that given half a chance, consumers can overcome these obstacles to wealth accumulation through improved money management. These issues form the basis of Green's book which is reviewed below, followed by a summary of the research and important findings in the conclusion.
Scarcely a day goes by without a new service charge being assessed by banks for one service or another, and many American consumers have suffered as a result. Not only are the bankers after consumers' money, a whole laundry list of financial services organizations is standing by, ready…… [Read More]
For example, the value of some gas to someone that is just trying to mow their lawn is a lot less than with someone who is trying to escape a coming hurricane.
However, a dollar-based system is better in that the value of money is much more stable and definable than with non-cash items because the value of those non-cash items (or any other "currency") is subject to a lot of disagreement and questions. $100 in U.S. dollars is worth much the same to one person as it is another. The gas example above can apply to money as well, but not nearly to the same degrees and lengths that bartering values would be, all else equal.
Also, there is clear regulation for the value of the dollar and the regional differences are going to be a lot less not counting the differences with the cost of living and access…… [Read More]
he/she will be willing to gamble the money without any thought of saving it for the future. A money earned in gambling is easily consumed in more gambling.
Another method where money is obtained is by accepting money as form of allowances. Normally, teenagers or those that are still dependent of the parents receive this form of money. These are the people who are still being taken cared of by somebody else - probably by the people whoa re much older than them. These are the people who also do not have much concern about their health and safety, for there is somebody else who takes note of that. The amount of money given as the form of allowances is limited and may vary depending on the need of the person himself. Post often than not, parents and/or guardians who provide for the money sets guidelines on how much money…… [Read More]
Money as a Motivator justifies its points by proving money to be an essential source of motivation for many people. This paper explains how money is an important factor in producing good and productive work from employees of any company. This paper also highlights some quotes to support its claim.
Money As A Motivator
ealistically and practically money is one of the major forces that drives human beings to be more productive. Statistics have shown that money is one of the top five motivational factors. Money no doubt is important because it allows one to acquire a standardized living style, earn bread and butter and fulfill all desires. If a company's employee is given an incentive of a bonus than there is a very high probability that his/her work performance will increase. Even though not all professionals have financial goals and concentrate more on their professional goals they too to…… [Read More]
Week 1 Discussion
What is Money Worth
Time value of money is an important consideration when making financial decisions. For instance, money is useful for making immediate transactions—but if one holds onto cash too long, what happens to the value of the dollar over time? An historical chart shows perfectly well what happens: it loses value substantially. Thus, to maintain the value of one’s wealth it is important to think about alternative investments that keep track with the rate of inflation—assets such as precious metals or real estate. There are also risk assets, such as equities. Even still no investment is risk free and bubbles blown today in markets can pop tomorrow. This happened in the gold market a few years ago. The equities markets have yet to pop in any meaningful way, but that does not mean they won’t. And real estate values plummeted in 2008 when the housing…… [Read More]
12-8) if Tulip is paid $60,000 for her equity, that is a no bonus scenario. The entry would be:
Tulip, capital $60,000
If Tulip is paid $80,000 that is a bonus to the retiring partner. The remaining partners would pay out Tulip based on their new income sharing ratios, which would be 5:3, reflecting the degree of increased share each has of the partnership with the withdrawal of Tulip. The payout is $20,000.
Tulip, capital $60,000
Holland, capital $12,500
Flowers, capital $7,500
If Tulip is paid $30,000 this reflects a bonus to the remaining partners. Since Tulip's value was $60,000 the remaining $30,000 would be allocated to Holland and Flowers based on the new ratios.
Tulip, capital $60,000
Holland, capital $18,750
Flowers, capital $11,250
12-12) Return on equity is the net income for each partner divided by the average equity. Average equity is calculated…… [Read More]
The third secondary source we will look at here is Kaiser (2009). Kaiser argues that money has corroded the electoral process in the United States. He gives statistical data on the rising cost of political campaigns as an indication of how money's importance has grown in the last several decades. If the campaigns of all the candidates for President, the House, and the Senate cost less than a billion dollars in 1976, in 2000 it was $2.8 billion (even if adjusted to the inflation), while in 2004 it was $4.2 billion. "This steady increase appears now to be a permanent fixture of our politics," he says (p. 290). Kaiser also gives examples of how money spent by individuals allowed them to win seats in the House or the Senate. For example, John Corzine, a retired investment banker and a Democrat, won a Senate seat from New Jersey in 2000…… [Read More]
The existence of money makes exchange easier, compared with barter systems, because money provides a stable store of value. If exchange is conducted with physical goods only – as in a barter system – then there are many points of friction that will inhibit exchange. First, goods have different physical characteristics that can put limitations on exchange. Some goods are perishable, others too large to transport, still others difficult to transport. Two goods may have equivalent value, but these physical limitations create barriers to exchange. How does one exchange a house for a year's supply of fish, for example? They might have roughly the same value, but you can't take all the fish at once, you can't trust that the fish will be delivered later, and moreover if the person wishes to take back the house because the deal fell through, but the other person ate all the fish,…… [Read More]
He also recommends investing in a oth IA, rather than a traditional 401K, because the oth accounts are safer and usually pay back higher dividends. He says, "Generally 401k and 403b accounts underperform IA accounts because they offer less options and flexibility for investments and impose higher fees" (Green 101). He talks about how the stock market is not such a good investment anymore since it fell in 2008, and he offers ways to make the stock market more effective. These are all good ways to get finances back on track once you have saved some money, and they make you feel more effective in managing your own financial future.
A big portion of the last part of the book is devoted to the stock market and how to make it work for you. This is probably the most confusing part of the book. It is written as simply as…… [Read More]
money and recognition are important motivators for employees.
There are a number of job-related factors due to which employees are and can be motivated. This is the reason why efficient managers always think about the needs of the employees and then plan and provide the proper motivation strategies accordingly. This is exceedingly important as a workforce that is motivated may eventually profit the organization by contributing in a positive and powerful manner. Thus, it is really necessary to motivate the employees by both money and recognition as the absence of any of the two motivational factors may result in employee dissatisfaction.
Importance of Money and ecognition to Employees
According to Jack Welch, CEO of General Electric, "You have to get rewarded in the soul and the wallet" (as qtd. In Neff 2002). It simply means that companies must not consider it enough to pay ample money to their workers believing…… [Read More]
Money Hurts Economy Analyze compare effectiveness (A) thesis statements (B) evidence, (C) rhetorical strategies (logos, ethos, pathos) dentify essay thought effective explain .
Rick Rilley's essay "Nothing but Nets," Stanley Fish's essay "But Didn't Do t" and David Wolman's essay "Time to Cash Out: Why Paper Money Hurts the Economy" all address contemporary issues and are all meant to emphasize how apparently simple ideas can bring reform to society. All of these essays are directed at raising public awareness concerning concepts that many people today currently believe to be insignificant when compared to the world's greater goal to experience progress through technology and finances.
Rilley's thesis deals with making it possible for the masses to understand how some small interventions can save lives and can help individuals combat maladies that claim thousands of lives every year. The writer concentrates on producing solid evidence with regard to how a sum as…… [Read More]
Finally, Pilarski reviews the explanations which blame airline underperformance on onerous government-imposed restrictions and obligations. Many observers, especially deregulation-fanatics, claim that airline companies are inhibited by excessive government regulation and public ownership of airlines. Pilarski rejects these explanations which attribute financial performance to government interference, stating that airline carriers outside of the U.S. subject to much more regulation have performed better than unregulated airlines.
Overall, Pilarski seems to agree that it is difficult to be profitable in aviation. What Pilarski is saying is that, for this very reason, only serious, competent players should enter the aviation business. The airline industry is a high-risk, high-overhead business, a point which appears to be ignored by the financiers, lawyers, and business consultants who help the foolhardy set up airline companies.
From a methodological perspective, Pilarski does a good job of refuting dubious claims through sound economic reasoning and historical evidence. For…… [Read More]
While time did not have an incredibly large impact on the decisions made by respondents according to the instrument there was a statically significant change that calls for further research with larger populations to be undertaken. It is also possible that the specific creation and presentation of the scenarios included in the instrument had some level of influence on the results, as there are other considerations that are at play in each of the scenarios -- most importantly, the additional time required to change the course of action, which is distinct and wholly separate from the sunk-costs associated with the original course of action -- and this combined with the other design issues noted above and the lack of strong and clear determinations of mean differences means that the results of this research are ultimately inconclusive.
While the results of this research might not be entirely conclusive, they do…… [Read More]
The adolescent perspective as depicted in the short stories of Joyce, Faulkner, and Cather
The search for higher social status as a form of personal fulfillment and self-definition all mark the coming-of-age stories of James Joyce, illiam, Faulkner, and illa Cather, despite the distinct differences between the three male protagonists created by the authors in their seminal short stories "Araby," "Barn Burning," and "Paul's Case." All three short stories feature a young protagonist whose illusions of finery and higher class status are shattered. Because these aspirations are also often connected to sexual desires, this fall from grace is particularly difficult for the young men to tolerate.
In "Araby," the young male protagonist becomes enamored with a young woman who seems innocent, above his own class, and charming. hen she professes to wish to go to the Araby bazaar but cannot because she must go on a retreat with her…… [Read More]
economic crisis in Europe and the increasing costs for European countries to borrow money and bail out other Euro countries in financial distress. The EU nations that use the Euro have experienced a crisis among certain countries with high debt requiring bailouts for Greece and Ireland and the likelihood that Portugal and Spain may also need a bailout. Postponing the restructuring of high interest debts has led to further crisis rather than resolving any of the problems faced by insolvent countries. Huge transfer payments from the more powerful Euro countries, like Germany, to the failed economies of Greece and Ireland have made investors nervous and led to less investment at a crucial time. The author suggests that the debts of troubled countries need to be restructured now in order to create a sustainable payment to increase confidence and secure future payments.
Creditors will also have to shoulder some of the…… [Read More]
One needs to keep the following questions in mind in order to understand cash flow-in and out of an organization:
1. How much cash does my business have?
2. How much cash does my business need to operate?
3. Where does my business receive its cash? Where does it spend its cash?
4. How do my income and expenses affect the amount of cash I need to expand my business?
Flow-out of cash goes to cover supplies, equipment, payroll and other needs that a business needs to cover in order to achieve its business purpose. Cash is needed for operating expenses, taxes, interest and principal to creditors, and dividends to stockholders. Flow-out of cash enables the business to be conducted. The amount of flow-in, however, determines whether the business can be sustained (i.e. whether there is a profit and a marked profit), and whether it is rational for flow-out to…… [Read More]
There are two major forces that exist in the United States and in other modern countries that cannot be missed or ignored. The first would be sports. There are millions and millions of people that love sports and that would include both watching them and actually participating in them. Common examples of this would include basketball, baseball and football. However, the focus of this report will be rodeo. The other major force that exists in modern countries is the corporate sphere. The common manifestations of these corporate entities are advertising and the products that are sold to people. hether it be cars, video game systems, homes or what have you, corporate powers make the economy run, they pay a lot of taxes and so forth. However, the two items mentioned above heavily converge in many ways and Jane Martin's lament is that this convergence is too excessive and…… [Read More]
On page 348, #3, Kendall says the media use "thematic framing" and "episodic framing" in portraying poor Americans. Define these terms in your own words and discuss whether the media typically portray the poor as "deviant" or "other" (according to pp. 330-346).
Episodic framing looks at specific events, or episodes, while thematic framing attempts to put those events in broader context. For example, a news story on high rates of unemployment would be thematic framing, because it discusses a national, and even global problem, over which the individual has no control. The poor economy is blamed on corporate America and the greed and mismanagement of large organizations such as financial institutions. With episodic framing, specific examples are used and not placed into the greater context. It is easy, then, for the media to portray the poor as lazy, uneducated and irresponsible, putting the blame for their poverty back on…… [Read More]
Money and the Prices in the Long un and Open Economies
Analyze the history of changes in GDP, savings, investment, real interest rates, and unemployment and compare to forecast for the next five years
The GDP of the United States in 2010, approximately five years ago, stood at $14.96 trillion. Fast forward five years to the present day, the GDP of the nation currently stands at $17.42 trillion. Looking forward, according to Trading Economics (2016), it is projected that the growth of the GDP rate will be in the scope of 2.00% in the year 2020. Therefore, it is forecasted that by 2020, the GDP for the country will be $20.33 trillion (Trading Economics). With regard to savings and investment, it is imperative to point out that the United States has been incessantly having trade deficits for the past four decades, owing to the high importation of oil and consumer…… [Read More]
social cultural effects money. Use concrete examples readings; addition
The social and cultural effects of money are quite considerable. However, they must be viewed within the proper sociological and, indeed, anthropological context for their effects to truly be appreciated. Money, regardless of the denomination or type of currency, is a capital means of procuring essential needs. Its value is strictly related to its ability to procure essential goods which are those pertaining to the basic elements that humans need to exist such as food, clothing and shelter. Therefore, the social and cultural effects of money are more accurately described as those relating to the things that money can afford or provide. Viewed from this perspective, there are several discernible ramifications that money engenders within contemporary and previous societies, all of which are related to the provisioning of essential elements of human existence.
Elucidated within the point-of-view of the preceding thesis,…… [Read More]
Value of Money
I would define the time value of money as the value of what that money could be earning between the present day and the future time that one could have the same amount of money. In addition to the financial earnings, I would factor in opportunity costs to my calculation of the time value of money, because it is important to consider what opportunities, not simply earning opportunities but general opportunities, one would miss by not having that money available in the present time. In other words, the time value of money is what one will have to make in the future to replace the money that is missing now combined with the opportunities lost in the interim.
It is critical for financial managers to understand the concept of the time value of money, because it is the whole concept behind financial planning. Many people who seek…… [Read More]
The operating decisions that must be made by Thomas Money include the level of output that the company needs to have in response to the prevailing economic conditions. The company is facing a difficult economic environment at present. Thomas Money's performance is strongly correlated with economic measures that focus on construction, such as new housing starts and new business or institutional construction. In the current environment, housing starts are entering into a long period of decline following the bursting of an unsustainable housing bubble (Byun, 2010). The one bright spot in Thomas Money's business is that there is strength in institutional construction in the health care industry, as the elderly population increases, driving increased demand for health care services (no author, 2007). However, this improvement is not enough to keep Thomas Money's customer in business and as a result the company is facing a high level of repossessions.…… [Read More]
Influx of Money Impact Hospitality Sector in Brazil
how influx of money impact brazil'S HOSPITALITY SECTO
How Money Influx from World Cup 2014 Impact Brazil's Hospitality Sector
How Money Influx from World Cup 2014 Impact Brazil's Hospitality Sector
The literature review seeks to scrutinize and evaluate the probable effects of the influx of money from 2014 World Cup in Brazil in relation to growth and development of the country's hospitality industry (Jones 2012). Since the major declaration (October 2007) by FIFA that Brazil shall be hosting the biggest world event, the hospitality sector has embarked on building new hotels, bistros, and lodges. The sector has also stepped up efforts to renovate existing facilities ahead of the tournament slated for June 2014. Although preparations are still underway, an influx of visitors and money is inevitable with considerable accommodation bookings reported across the country (Jones 2012).
Influx of Money is…… [Read More]
function of money.
Money has four purposes. It serves as:
Medium of exchange -- i.e. The currency used for bartering one good for another
it serves as the standard numerical unit of measurement of the market value of goods, the value of the program, or transaction
A store of value -- it can be reliably saved, stored, and retrieved and used whenever it is retrieved. Its value remains unchanged.
A standard of deferred payment. - It is an accepted way to settle a debt ( Mishkin .2007)
• Explain how the central bank manages a nation's monetary system.
The Federal Bank manages the nation's monetary system by virtue of three strategies:
It can change the interest rate on money that it lends to banks. A higher interest rate makes money more expensive. Banks may be, therefore, more reluctant to sign loans to applicants. On the other hand, the Bank by…… [Read More]
What is Money?
Money is anything that is accepted as a form of payment and in the modern world this typically currency. Today's currency is essentially created by governments, and backed by their ability to tax. Thus, money today derives from both the legitimacy of the state and from the revenues of the state. Money is typically issued by a central bank, and it has considerable leeway with respect to how much money it issues. The value of money is determined by the supply of and the demand for money.
The supply of money is controlled, as we've said, by the central bank. Demand for money is based on the need for that currency to make transactions. So demand for Japanese yen is in part related to how much yen people need to buy goods and services from Japan. The same is true of all currencies, including the U.S.…… [Read More]
Value of Money
My SLP company is Wal-Mart. For me I would pay less than $100,000 for this bond, because I know that the $100,000 face value of the bond is not going to have the same purchasing power in a year as it does today. The value of the bond will therefore be less than $100,000, based on the prevailing interest rate. Wal-Mart is a company with a high amount of cash flow that is quite reliable. Thus it is not expected that Wal-Mart would pay much in the way of interest, maybe 2% per year. This implies the value of the bond would be around $98,000.
The discount rate for this bond, based on a $98,000 price, would be 2.04%, as calculated by ($100,000 -- 98,000) / 98000. This reflects the return that the bond offers to the investor.
Target is a company in the same industry as…… [Read More]
Demand for Money
Money in economics terms can be defined by holding cash or non-interest bearing bank accounts. Since these holdings are less advantages than interest bearing accounts or some form of investment, there has to be some motivation to keep cash or completely liquid assets. There are a range of different motivations that can be used to describe these behaviors. However, most of them use liquidity in one form or another. For example, it is necessary to have liquid assets to make purchases or pay bills for example. So if an individual gets their paycheck they may deposit a portion of the check into some form of investment account, while keeping a portion of it liquid to cover their monthly living expenses.
An individual may also move money to a liquid account if they are planning to make a purchase in the short-term. The demand for holding money can…… [Read More]
Money in Aviation: An Examination of Support
The history of American flight is generally one of pride and wonder. Historical figures associated with the first airplanes are generally revered by history books and society as a whole. These are figures like the Wright brothers, Amelia Earhart, Charles Lindbergh and others who most agree made a positive impact on human life and symbolize a leap of mankind towards advanced technology and increasing modern times. Modernity. Technology. These are all things that airplanes and flight represent to Americans and they're widely viewed as things which have improved life on this planet for the better. This begs the question as to why the airline industry still remains one of the most volatile, low (or no) profits business around. The book, Why We Can't Make Money in Aviation, by Adam M. Pilarski, seeks to both scrutinize and illuminate the general failure of the airline…… [Read More]
Demand for Money
The international community is currently facing the most severe crisis since the Great Depression of 1929 -- 1933. It started within the American real estate sector and soon expanded to the rest of the sectors, as well as to the rest of the global economies.
The causes and impacts of the crisis have often been discussed in the media and within the specialized literature, and the discussion is far from over. Still, this approach to the crisis is more descriptive and reflective. At this stage nonetheless, it is necessary to implement a proactive approach through which to promote solutions to overcoming the crisis.
Governments across the globe have each developed and implemented their own solutions to the crisis, ranging primarily from injecting capitals in the troubled industry sectors and companies, to efforts aimed at reducing federal costs. In the completion of these efforts, a crucial role is…… [Read More]
In the long run, the volatility of money supply will also only cause changes in inflation rate and thus the nominal GDP of the country, as believed by monetarists, as the markets are believed to be always approaching their full employment rate.
But with evolution of capital markets and appearance of numerous wealth capitalization methods besides holding M1, the velocity of money became very variable rather than stable and equal to one, which made scholars hesitate on the validity of Quantity Theory of Money, while equation of exchange is supported by majority of economics schools.
Besides many contributions made by Knut Wicksell into the economic theory, the major appreciated work is the interest theory implications from his work Interest and Prices, where he separated the notion of monetary interest rate, or interest rate derived from the capital markets; and the natural interest rate, or the interest rate neutral to the…… [Read More]
Functions of Money
CheckPoint Money esource: Money: Its Functions Characteristics Submit a 250- 300-word response addressing points: • Money acts a unit account, medium exchange, a store . Describe functions. • Provide money functions.
Money is defined according to it three major function. It is in many cases referred to as a store of value, unit of account and a medium of exchange. Money is any item that is legally satisfying the needs for undertaking a transaction in an economy Woodford M., 2000()
Money as a Unit of Account
A unit of account means assigning a value to goods and services in the economy Woodford M., 2000.
This function of money assigns money the key role of designating value to tradable items in an economy. Money as a unit of account indicates what buyers and seller are willing to part with or receive.
When one visits a suit merchant,…… [Read More]
Although this does not necessarily have an immediate monetary translation, it shows that the individual will prefer to receive his money and dispose of them earlier rather than later on.
On the other hand, we can indeed see that the present value of money is greater if we can deposit the money received at time t0 to a simple deposit account, with a certain interest rate. We will expect that amount of money to gradually increase over time and to reach a higher value some time in the future. As we can see from this example, the time value of money does not only fluctuate, but actually increases from moment t0 to moment t1.
3. Does one always earn the yield to maturity on bonds? Explain.
Not necessarily. In order to best explain this, we need to further clarify the concept of yield to maturity on bonds. The final yield…… [Read More]
Still, since it is looking to sell a property asset that is not their main residence, they will be required to pay a capital gains tax, in the amount of 18 per cent (Direct Gov). For an estimated retail price of £150,150, and a tax rate of 18 per cent, Olly Lloyd would have to pay £27,027 in taxes.
For the new employment contract, Lloyd would have to pay taxes in the amount of £5,281. The sum is decreased significantly by deductions adherent to contributions made by Olly to the pension funds (Listen to Taxman).
c) Suggestions for financial management
Leone Lloyd-Cardle is, without a doubt, facing severe problems. In order to restore the responsibility and stability of her financial decisions, the following financial management recommendations are made:
Discussing the problem with her husband. Having reached such a high level of debt indicates severe problems which cannot be overcome by…… [Read More]
If the Federal Reserve requirement is 10%, the money multiplier is 10, meaning that banks can lend out 90% of every dollar they receive as illustrated by the following example of multiple deposit creation (Larsson, 2005):
John deposits $10,000 into his checking account at ank a.
ank a Deposit: $10,000
Reserve (10%): $1,000
Lendable Amount: $9,000
Mary borrows $9,000 from ank a and buys a car. The car dealer then deposits $9,000 into their account at ank .
Reserve (10%): $900
Lendable Amount: $8,100
Mark borrows $8,100 from ank . And has surgery. The doctor then deposits $8,100 into his account at ank C.
Reserve (10%): $810
Lendable Amount: $7,290
This process continues until the lendable amount is 0. When M1 is measured, the original $10,000 deposit will have created a total of $100,000 in deposits system wide (Larsson, 2005).
eale, L.…… [Read More]
According to Pilarski (2007), "the financial situation of the airline industry, especially in the U.S.A., has been between disaster and catastrophe," (p. 3). Financial wizards like Warren Buffet have made "bombastic pronouncements" related to the economic illnesses of the airline industry (9). Dynamic entrepreneur ichard Branson, himself seduced by the desire to own an airline, has likewise stated, "How do you become a millionaire? Start as a billionaire, and then buy an airline," (cited in "In-Depth Drilldown Of The Airline Industry - Part 1, 2012). Airline companies operate with razor-thin profit margins, if any at all. Moreover, the situation was bad enough befofre but has grown worse since September 11. "Since 9/11, we've seen tremendous changes surrounding the airline industry: security, regulations, and operational costs. Overall, these variables have had tremendous, and far-bearing, negative impacts on the industry," ("In-Depth Drilldown Of The Airline Industry - Part 1," 2012).…… [Read More]
Nichols and McChesney (2013) write about election spending and the negative effect that it has on democracy and governance in America in their book Dollarocracy: How the money-and-election complex is destroying America.. They have divided the book into central themes, including the concept of privilege, spending by the very wealthy, advertising and the role of the media in the election machine, finally arriving at some suggestions for reform to restore balance to the democratic system of the United States.
The book opens with an explanation of one of the core principles that underpins their arguments, that America is a society driven by class differences. Those with privilege consistently seek to use that privilege to enhance it. The authors make the case that such practices at this point are so rampant that "the United States is now rapidly approaching a point where the electoral process itself ceases to function as…… [Read More]
A much more important avenue of interdiction to combat terrorism (and the drug trade, for that matter) is money laundering, by which money for illegal goods and services changes hands on the black market. Money laundering is facilitated by corruption within state institutions and international banks and can be most effectively fought there (Blank, 2001). Some potentially effective means of reducing money laundering include: providing more oversight and transparency to international banking, reducing layers of bureaucracy in government institutions in which below-board transactions can take place beyond the reach of law enforcement, and enacting strict penalties for corruption. While it will be impossible to fully eliminate money laundering, these are important key steps that can be taken.
Blank, S. (2001, December). Narcoterrorism as a threat to international security. World and I, 16(12), p. 265.
Felbab-Brown, V. (2006, January). A better strategy against narcoterrorism. MIT Center for International Studies. The…… [Read More]
Ascent of Money
As we will see in this short essay, The Bank of Amsterdam, the Bank of England and the Federal eserve are linked in the history of money and banking. We will investigate the roles that each of these institutions played in providing a critical institutional foundation for the expansion of the world trading system. We will explore the Bank of England's role in providing a guiding influence in the functioning of the gold standard. The creation of the Federal eserve was linked to the actions of the Bank of England which was what it was modeled upon.
While not a true central bank, the bank of Amsterdam was a precursor and was founded to help the Dutch finance their wars against Spain. Paper money was issued based upon the public credit (Ferguson, 2008, 47). This type of institution spread to England where the Bank of England was…… [Read More]
value of money is perhaps the most critical concept in modern financial theory. According to Bianco & Poole (2010), "While executives and academics often disagree, they all agree that the time value of money (TVM) is the most important finance concept that should be taught in introductory finance classes" (Gup, 1994) Undergraduate business students are typically exposed to time value of money concepts in more than one course. Introductory accounting and financial management courses always cover TVM. Students are often taught this subject in mathematics and other general business courses. Many techniques are utilized for teaching and solving TVM problems including formulas, tables, financial calculators and spreadsheets." (Bianco, Poole, 2010)
In my opinion, the idea for TVM is important due to the notion that a dollar invested today increase the value of dollars earned today due to the value of receiving P + i, which is principal plus interest. According…… [Read More]
Role of Money in Politics
The influence of money on the contemporary politics is enormous and one that cannot be wished away. The role that money plays is as significant as the victory of the party. It has been observed in all the campaigns that the party members usually fall back to funds drive in order to raise money for the campaign, this is an aspect that has already began in the U.S.A. As we speak with custom made merchandise going out so as to raise money for the campaign period that is yet to come.
The debate on corporations' involvement in politics has been around for a long period of time, with those arguing for it indicating that it is a right of speech to the corporate world as enshrined in the First Amendment. It is a tricky situation taking into account the fact that corporations are treated as…… [Read More]
innie exerts an opposite influence by recalling to Jake the necessity of being a good, moral person if he wishes to keep her in his life. Even the baby that innie is carrying plays a part in Jake's need: he uses the baby as leverage to win back the money that Gordon has pilfered from him and innie. The baby is "time," and "time" is what Gordon really values. Jake offers Gordon the opportunity to make right with innie by donating the $100 million from the trust fund to the charity that Jake and innie support. By helping Gordon make right, Jake buys himself an "in" with innie, and Gordon is there to insist that the two give their relationship another try.
Prior to this happy reunion, however, Jake suffers his lowest moment in the film. That moment comes as a consequence of the false solution provided at the end…… [Read More]
message to people in our society that professional baseball players and other athletes make more than soldiers in combat. This message must be fundamentally questioned, given the disproportionate degree of significance we give to the careers of athletes. Big name athletes are touted as role models, while ordinary soldiers are largely ignored, or at best given a few words in print if they distinguish themselves heroically in combat. The discrepancy between the utility of certain occupations such as soldiers and nurses, versus occupations such as professional baseball players and entertainers, and the disproportionate salaries made by the latter have caused many to question the fairness of how salaries are allocated within our society. Many of the arguments cited in favor of professional athletes' salaries could easily apply to other high-risk professions. This paper argues in favor of reducing baseball players' salaries through more aggressive salary caps as a way of…… [Read More]
4) Sullivan makes an argument that laws should be passed to stop the actions of Garfield and those like him. Assuming that there are no anti-trust issues (anti-competitive issues), does government have a legitimate role here?
While I can understand why Sullivan would be angry, I don't think government does have role in this situation. We have a free enterprise system, and you can't legislate ethics. Both sides had tried to deceive each other, but neither side had tried to deceive the people.
5) Jorgy states that a business is worth more than the price of its stock. Garfield uses an example of buggy whips to make the point that management has a responsibility to allocate corporate resources in such a way as to maximize shareholder value. and, if management fails to uphold its fiduciary responsibility in this way, then you can't blame people like him for stepping and doing…… [Read More]
The keystone species of this ecosystem is pricing and the systems to support their definition, management and exception management. Pricing as the keystone specifics of selling and service systems also acts as a catalyst of the quantity and profitability of transactions. Pricing also acts as the defining element of how elastic or inelastic demand for products will be as well. Pricing is so potent as a keystone species it can communicate in an instant what the value of an entire business is. Consider the pricing for a diamond ring that is real, over 4 karats large, versus a cubic zirconium imitation and the example becomes very clear. The price of a Yugo car vs. A new Mini also shows this point, and even in commoditized products pricing still sends a very clear message of implied value and market position.
The information ecology of a selling and service ecosystem also requires…… [Read More]
Cash is the main basis of financial management in a new company. In most instances, the period between payment of suppliers and employees as well as a collection of debt from the customers is often a challenge. The solution to all these financial challenges is sound financial flow management. Managing of cash flow means delaying expenditures of cash and at the same time ensuring anyone owing the business pays up rapidly.
Managing Cash in a new business
Measuring of cash flow is necessary as accurate financial flow projection helps the business owner to be aware of an upcoming business challenge before it happens. On the other hand, cash flows should not be used to gauge the business environment in the future. There are a number of elements that need to be considered to counter the challenges. The factors are evaluating the payment histories of the customers, business thoroughness…… [Read More]
Money Its Value?
Using objects such as shells, coins, and other things of value to a community or individual has been practiced for thousand of years. If a close enough look could be taken, spending "money" probably started with Adam and Eve. When this exchange of tokens of some sort takes place, the tokens acquire a worth and enable the spender to obtain goods or services.
Money is defined as, "any definite or indefinite object which has value to both parties involved in the transaction." (Webster's New World Dictionary, 2nd College Edition).
Many different goods have been used as money throughout history. Over the centuries, only two commodities, gold and silver, have emerged as money in the free competition of the market, and have displaced the other commodities. In a free market, the medium of exchange is developed by people and their economic interactions. This is what establishes what money…… [Read More]