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1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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W6: Objective of Monetary Policy

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Week 6 Discussion Post 6

What are the basic objectives of monetary policy? Comment on the cause-effectchain through which monetary policy is made effective. What are the majorstrengths of monetary policy?

Your initial discussion posts must be submitted by midnight, Day 3 and then yourresponses to 2 of your classmates’ posts by have to be submitted by midnight,Day 7.

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Week 6Kayla Palmer posted Jan 11, 2023 10:55 PM Subscribe

Good evening class,

The basic objectives of Monetary Policy is to stimulate economic growth, full employment,

and price stability. The Fed can do this by their influence over interest rates, and through

the supply of money and credit. Monetary Policy is made effective through open-market

1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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operations, the reserve ratio, and the federal fund rate. Open-market operations consists

of government securities, or bonds, being bought. With bonds being bought this causes

the supply of money to increase, which then causes the demand for bonds to increase,

causing an increase in the prices of bonds, which then lowers the interest rates. The

reserve ratio the amount of money banks are required to keep essentially on hand. The

higher the ratio the less lending money they have to give out to their customers. The lower

the ratio the more lending money they have to lend out to consumers. The federal fund

rate is essentially the interest rate at which banks are charged when borrowing money

from the Fed or each other. By borrowing money at a low interest rate they can increase

their money reserve which they can lend out again increasing money flow. The strengths

associated with Monetary policy is that it can help create a more active and balanced

economy, it can reduce inflation, decrease unemployment and create stable prices.

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W6 Objective of Monetary PolicyTravis Tillman posted Jan 11, 2023 9:25 PM Subscribe

Hi Class,

The basic objectives of the monetary policy are promote goals of economic growth , full

employment, and price stability by influencing interest rates, the supply of money and

credit. According to the Federal Reserve "The Federal Reserve Act mandates that the

Federal Reserve conduct monetary policy to promote effectively the goals of maximum

employment, stable prices, and moderate long-term interest rates." (Board of Governors

2021) In decided the best way to make adjustments to the policy over time the Federal

Open Market Committee takes into account a large amount of data. It takes the

prescriptions for the federal funds rate provided by policy rules. These rules have

limitations that goes against mechanically following any rule.

If you visit Monetary Policy Principles and Practice at federalreserve.gov they provide a

figure "The Transmission of Monetary Policy." This figure breaks down the goals, monetary

policy, transmission channels, and effects. The goal is to dual mandate, which is maximum

employment, low and stable inflation. The monetary policy is too large for the federal

funds rate and communications. The transmission channels are overall financial conditions,

1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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like interest rates and asset prices. The effects spur or retrain growth in overall demand for

goods and services.

There are a number of major strengths of monetary policy. Some are they encourage high

levels of economic activity, a stable global economy, promote additional transparency,

promote lower inflation rates, creates financial independence from government policies,

implemented with relative ease and can boost exports.

Have a great day. Travis

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Martin week 6Martin Pinedalopez posted Jan 11, 2023 8:56 PM Subscribe

Hello everyone,

I hope you all are having a great beginning to this new year; this week's topic is to discuss

the primary objectives of monetary policy. This week I learned that the primary goals are to

control the available amount of money and manage how new money is created and

delivered to the economy. The government has placed into order a cause-effect chain that

helps monetary policy become effective. The cause-effect chain has three parts that help

make it effective: discount rate, reserve requirements, and open market operations. A

summary of these is the discount rate, which is an interest rate. The discount rate is the

interest rate that the Fed charges commercial banks for short-term loans. Open market

operation is how the Fed can affect the current interest rates. They can purchase certain

things like bonds in the free markets, which can directly affect lowering or raising the

current interest rate. The last thing I will be covering is the major strengths of monetary

policy. Its strengths are that it helps lower inflation rates, creates more access to liquidity if

needed, and helps the economy balance out. History repeats generally, and we have seen

these things down in the 2008 recession along with covid. The decision that the Fed makes

1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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directly impacts the economy. It can print more money, help with interest, and lend to

banks as a last resort.

– Martin

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Week 6 – Objective of Monetary PolicyChristopher Fowler posted Jan 11, 2023 4:23 PM

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Hello Classmates,

There are two major factors of monetary policy with three variables pairing within their dealings. Thesetypes of policies are utilized also for the hope of growth and making goals to counter decline through

i l ti E i M t P li d l ith i i d ith F d l limore

Week 6 DiscussionJonathan Malcolm posted Jan 11, 2023 1:44 PM

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Hello class!

The basic objectives of monetary policy is promoting the goals for growth of the economy,

Collin Rhodes – Week 6Collin Rhodes posted Jan 11, 2023 1:37 PM Subscribe

According to this week's e-text, the primary objectives of monetary policy are to help

promote goals of economic growth, full employment, and price stability by influencing

interest rates, the supply of money, and credit.

1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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Week 6Justin Shon posted Jan 11, 2023 2:02 AM

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Monetary policy is a policy implemented by central bank of a nation to control either

interest rate or money supply to reduce inflation and to maintain price stability. In the

U.S., Federal Reserve is responsible for monetary policy. The basic objectives of monetary

Objective of Monetary PolicyJack Daniels posted Jan 11, 2023 12:19 AM

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The basic objectives of monetary policy are “controlling inflation, managingemployment levels, and maintaining long-term interest rates”. (Amadeo, 2022) Thecause-effect chain can be simply stated as adding and subtracting liquid money tofinancial institutions. This is done through monetary policy. Expansion or contraction

Week 6 PerezRuben Perez posted Jan 11, 2023 12:14 AM

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Hello class,

Monetary Policy is a process that promotes the stabilization of prices and the economy.

1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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Week 6 DiscussionTrey Jarrell posted Jan 10, 2023 3:12 PM

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Last post Tue at 8:46 PM by

Bernard Vinson

Good afternoon Professor Wu and Classmates,

When looking at monetary policy we see three major objectives that are followed. The first

Week 6 ScaggsDavid Scaggs Jr posted Jan 10, 2023 8:20 PM

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Last post Tue at 8:35 PM by

Bernard Vinson

Good evening everyone,

What are the basic objectives of monetary policy? The definition of monetary policy is a

W6: DiscussionBessy Guevara posted Jan 10, 2023 12:05 PM

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Last post Tue at 8:19 PM by

Shaun Richardson

Hello Dr. Wu and Classmates, For this week’s discussion we need to explain the basic objectives of

Week 6Justin Brannon posted Jan 10, 2023 6:48 PM Subscribe

Good Evening Class,

The basic objectives of monetary policy is to control the overall money supply, promote

1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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Last post Tue at 8:17 PM by

Shaun Richardson

Week 6Shaun Richardson posted Jan 10, 2023 8:16 PM

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Good evening everyone,

There are multiple objectives when it comes to monetary supply. To first define it from the

W6: Objective of Monetary PolicyMarcus Pegques posted Jan 10, 2023 3:59 PM

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Hello Everyone,

This week we are discussing “Monetary Policy.” The basic objectives of monetary policy are

WK6 DBBernard Vinson posted Jan 8, 2023 4:14 PM

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Last post Tue at 3:08 PM by

thomas mize

Hello Class,

The basic objectives of monetary policy may differ depending on the country's economic

1/12/23, 6:14 AM W6: Objective of Monetary Policy – ECON102 D005 Fall 2022

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Mize Week 6 Discussion Postthomas mize posted Jan 10, 2023 3:04 PM

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Hello classmates, for this week’s discussion we are asked to discuss thebasic objectives of monetary policy, the cause-effect chain and the majorstrengths of monetary policy. What is monetary policy, simply put, it is a

Week 6Pryde Black posted Jan 10, 2023 1:39 PM

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Hello class and Professor.

This week we learned about monetary policy. It is to my understanding that by altering the

Objective of Monetary PolicyLiza Escalante posted Jan 9, 2023 11:20 PM • 302 Words

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The following are the four most essential monetary policy objectives: