Select Page

I will pay for the following article Economics of Money and Banking. The work is to be 5 pages with three to five sources, with in-text citations and a reference page.

I will pay for the following article Economics of Money and Banking. The work is to be 5 pages with three to five sources, with in-text citations and a reference page. Investments are a boon for the progress of any economy. This does not imply that the commercial banks would charge negative interest rates to the investors in order to boost up investment thresholds in the country. The banking institutions may offer loans at zero interest rates. Zero interest rate policy under taken by the central bank of a country is a situation where they charge a low nominal rate of interest (Woodford, 2001). This is associated with stimulating the economy, when the pace of economic development is low in a nation. Interest rates can never be negative, a negative interest rate charged on loans is a hypothetical state where the bank would offer concessions on loans charged to the investors or borrowers. This will not only involve loss of gross reserve in a bank but also lead to non potential investments in the economy. The commercial banks will land up offering loans on risky and unviable projects and thus may be forced to offer implicit bail outs to many failed projects in the economy. This would make the overall investment market uncertain in the economy. Thus, interest rate charged on loans can never be negative. The Taylors rule is a model used for determining the interest rates in the economy. it was introduced by John Taylor in 1992. This rule explained the different interest rates that the Federal Reserve would probably set in future in United States, based on the theory of rational expectations in macroeconomics. Taylor framed his model assuming that all the economic entities in the market will always have positive expectations about the future economy. The Taylors model cannot consider the long term prospects of an economy (Asso, Kahn and Leeson, 2010). As taken in this essay, the Taylors formula is: r=p+0.75(5.5%-u) + 0.5(p-2) + 2. Where r = Federal funds rate. u= Unemployment rate. p= Rate of inflation. Fig 1: Federal Fund Interest Rates by Taylors Rule Years Federal Fund Rate ® 01/03/10 -1.24 01/06/10 -1.48 01/09/10 -1.48 01/12/10 -1.40 01/03/11 0.02 01/06/11 -1.25 01/09/11 -1.18 01/12/11 -0.80 01/03/12 0.19 01/06/12 -0.58 01/09/12 -0.28 01/12/12 -0.28 (Source: STLOUISFED, 2013a. STLOUISFED, 2013b) The table above shows the different quarterly rates of interest, the Federal Reserve could set in 2010, 2011 and 2012 according to the Taylors Rule. “Yes”, following the above schedule it can be concluded that the Taylors rule suggested keeping the federal funds rate negative in the recent years. This is because the economy is facing recessionary trails in the market in the last few years. A negative interest rate would suggest the Federal Reserve to set expansionary monetary policies and augment the velocity of circulation of money in the U.S. economy. Task 2 In normal market conditions, Taylors rule suggested that the federal funds rate must be such that the inflation and real interest rates in the economy would be 2% and the rate of unemployment naturally existing in the economy would be 6%. However considering the present recessionary trails in the market the Taylors rule have suggested that the federal funds rate must be negative to induce monetary easing in the crisis economy of U.S. The Taylors rule has become an important pivotal support for most of the policies framed by the federal bank. However, the analysis about different economic outcomes made by the Federal Bank is much deeper than the other central banks in the globe. Taylors rule viewed that the U.S. economy was in a crisis in the recent years, it was desirable for the U.S.

Give us your instructions.
Select the type of service you need: writing, calculations, or programming. We’ve created an intuitive order form that tells you what information to enter and where, so make sure to fill out each required field. Also, make your requirements as specific as possible. Don’t rush! Take your time and explain everything in detail how it works.

Proceed to checkout and enter your credit card details or PayPal login, how to pay. Follow the payment provider’s instructions to confirm the transaction.
Now your order is in our system! We’ll start processing it right away.

Place Your Order

Contact Us

Frequently asked questions
Is your service confidential?

When you place an order with our company, we ask you to provide us with such personal information as your name, phone number, and email address. We need this data to keep you updated on the important things related to your order or account.

Is there a possibility of plagiarism in my completed order?

We complete each paper from scratch and in order to make you feel safe regarding its authenticity, we check it for plagiarism before its delivery. To do that, we use our in-house software, which can find not only copy-pasted fragments but even paraphrased pieces of text. Unlike popular plagiarism detection systems that are used by most universities (e.g. Turnitin.com), we do not report to any public databases—therefore, such checking is safe.

We provide a plagiarism-free guarantee that ensures your paper is always checked for its uniqueness.

Is there a money-back guarantee? If yes, how can I receive a refund?

You can certainly get your money back in several cases. You can receive a full refund if you have paid for your order twice or if you have placed two identical orders. In case your paper was late or the quality of the paper does not correspond to your expectations, you will get compensation for these issues.

Do you keep a database of pre-written essays?

No, we do not have such a database. All papers you order from us are written from scratch. This means your paper is unique and has never been published before—neither will it be published after we deliver it to you.

 

When will my custom paper be done?

While placing an order with WritersHub, you can choose a period of time within which a paper should be delivered to you. The countdown until the specified deadline starts automatically from the moment we receive your payment in our system. For example, if you pay for your order at 6pm on Monday and choose a 3-day delivery option, you will receive your custom paper by 6pm on Thursday.

Remember that a writer needs a sufficient amount of time in order to conduct thorough research. Therefore, please choose the most suitable deadline when you place an order. Moreover, the later you need your paper to be delivered to you, the cheaper it will be. Thus, you will be able to save your money while your writer will have enough time to work on your order and ensure its quality.

Make sure you upload all the additional materials at the very beginning. If you fail to do that, the deadline for your order will be postponed as well.

I haven’t received my custom paper by the deadline. What should I do?

Let us know immediately about that. You can do it by writing a message on Facebook or email us. Our support manager will carefully examine your order and will assist you with it right away. The reasons for late delivery may vary from time to time. It can happen that you have entered a wrong email address or your spam filter does not allow you to receive emails from us. It is also possible that the writer is waiting for your reply and can not continue working without your assistance, or we are checking the work for plagiarism. Whatever the case may be, contact us if you have any problems with getting your order on time.