Monetary Policy Tools

Monetary Policy Tools

Order ID	53563633773
Type	Essay
Writer Level	Masters
Style	APA
Sources/References	4
Perfect Number of Pages to Order	5-10 Pages

Description/Paper Instructions

Monetary Policy Tools

Monetary policy refers to the actions taken by a central bank to manage the supply and cost of money and credit in an economy. The primary goal of monetary policy is to achieve price stability, which means keeping inflation low and stable. Central banks have several monetary policy tools at their disposal to achieve this goal, and in this article, we will discuss them in 1000 words.

1. Open Market Operations: Open market operations (OMO) involve the purchase or sale of government securities in the open market by the central bank. When the central bank wants to increase the money supply, it buys government securities from banks and other financial institutions, injecting cash into the system. Conversely, when it wants to decrease the money supply, it sells government securities, reducing the amount of cash in circulation. OMO is the most frequently used monetary policy tool by central banks.
2. Discount Rate: The discount rate is the interest rate that commercial banks pay to borrow money from the central bank. When the central bank raises the discount rate, it becomes more expensive for banks to borrow money, leading to a reduction in the money supply. On the other hand, when the central bank lowers the discount rate, it becomes cheaper for banks to borrow money, leading to an increase in the money supply. However, the use of the discount rate as a monetary policy tool has declined in recent years due to the limited impact it has on the broader economy.
3. Reserve Requirements: Reserve requirements refer to the amount of money that banks are required to hold in reserve against their deposits. When the central bank raises the reserve requirement, banks are required to hold more money in reserve, reducing the amount of money available for lending and investment. Conversely, when the central bank lowers the reserve requirement, banks have more money available for lending and investment, leading to an increase in the money supply.
4. Forward Guidance: Forward guidance refers to the central bank’s communication with the public about its future policy plans. By providing clear and transparent communication, the central bank can influence market expectations and help shape future economic outcomes. For example, if the central bank indicates that it plans to keep interest rates low for an extended period, it can encourage borrowing and investment, boosting economic growth.
5. Quantitative Easing: Quantitative easing (QE) involves the central bank purchasing large quantities of government bonds or other securities from banks and financial institutions. The goal of QE is to increase the money supply and reduce long-term interest rates, making it easier for businesses and individuals to borrow money. However, QE can also lead to inflation if it is not carefully managed.
6. Negative Interest Rates: Negative interest rates occur when the central bank charges commercial banks to hold their excess reserves. This policy aims to encourage banks to lend money to businesses and individuals, as they would rather earn a positive return on their money than pay to keep it at the central bank. Negative interest rates can also reduce the value of a country’s currency, making its exports more competitive in global markets.

In conclusion, central banks have several monetary policy tools at their disposal, including open market operations, the discount rate, reserve requirements, forward guidance, quantitative easing, and negative interest rates. Each tool has its strengths and weaknesses, and central banks must carefully consider their options to achieve their policy goals while minimizing unintended consequences. Effective monetary policy can help stabilize prices, promote economic growth, and support overall financial stability.

Monetary Policy Tools

RUBRIC QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points:  Student failed to submit the final paper. 20 points out of 50:  The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50:  The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately.  Elements of the required response may also be lacking. 40 points out of 50:  The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples.  The answer is complete. 50 points:  The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples.  No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points:  Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points:  Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points:  References to scholarly sources are occasionally given; many statements seem unsubstantiated.  Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points:  Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented.  APA 6th Edition is used with only a few minor errors.  There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points:  Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented.  APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points:  Student failed to submit the final paper. 5 points out of 20:  The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors  10 points out 20:  The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20:  The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points:  The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points:  Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements.  The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER CLICK ON THE LINK HERE:  https://essaysolver.com/orders/ordernow You Can Also Place the Order In www.perfectacademic.com/orders/ordernow / www.essaysolver.com/orders/ordernow
Do You Have Any Other Essay/Assignment/Class Project/Homework Related to this? Click Here Now [CLICK ME] and Have It Done by Our PhD Qualified Writers!!

PLACE THE ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

Do You Have Any Other Essay/Assignment/Class Project/Homework Related to this? Click Here Now [CLICK ME] and Have It Done by Our PhD Qualified Writers!!

Why Work With Us!!

• Tired of getting an average grade in all your school assignments, projects, essays, and homework? Try us today for all your academic schoolwork needs. We are among the most trusted and recognized professional writing services in the market.

• We provide unique, original and plagiarism-free high quality academic, homework, assignments and essay submissions for all our clients. At our company, we capitalize on producing A+ Grades for all our clients and also ensure that you have smooth academic progress in all your school term and semesters.

• High-quality academic submissions, A 100% plagiarism-free submission, Meet even the most urgent deadlines, Provide our services to you at the most competitive rates in the market, Give you free revisions until you meet your desired grades and Provide you with 24/7 customer support service via calls or live chats.