Balance of trade

Dear OTA, How important is the "balance of trade" to the United States economy? If the United States has a negative balance of trade how does that affect the economy as a whole? What economic indicators are most affected when the balance of trade is negative? Is the current balance of trade good or bad for the economy? ( ...continues

Monetary policy/Fiscal policy/Exchange rates

Explain how the United States influences exchange rates using monetary policy. List an example of how the policy is used and the impact it has on the exchange rate and why?

Trade deficit, monetary & fiscal policies

You observe that over the past decade a country's competitiveness has been continually eroded and it's trade deficit has risen. a) What monetary or fiscal policies might have led to such results? Why? b) What policies might you suggest to improve the countries competitiveness? Explain how that policy might work.

Fiscal policy

Explain how the United States influences exchange rates using fiscal policy. List an example of the use of the policy and the impact it had on the exchange rate.

Exchange rate

Dear OTA, Which is the better tool to use to adjust exchange rates, monetary or fiscal policy? And why?

Federal Bank Reserves

I don't know how to do it. Numbers confuse me! If banks hold a 30 percent reserve ratio, an initial increase in bank reserves of $30 will lead to an eventual: A) increase in the money supply of $180. B) increase in the money supply of $90. C) increase in the money supply of $100. D) increase in loans of $100. ...continues

Bank Reserves

I have a mental block when it comes to numbers. Can you help? Thanks. If the Federal Reserve requires that banks retain 15% of all deposits as reserves, a bank that receives $100,000 in deposits can loan up to: A) $30,000. B) $85,000. C) $115,000. D) $185,000. E) none of the above

Reserve Ratio and Money Supply

Assuming a 15% reserve ratio, an increase in deposits of $300,000 could eventually result in: A) a $2 million increase in the money supply. B) a $345,000 increase in the money supply. C) a $45,000 increase in the money supply. D) a $1.5 million increase in the money supply. E) there would be no change in the mon ...continues

I think this is Balance of Accounts?

I can't do math. Would appreciate your help. If banks are required to hold 20% of all deposits as reserve, and an additional 5% is retained as a hedge against falling short of reserves, then a $300,000 increase in deposits will result in: A) a $1.5 million increase in deposits. B) a $1.2 million increase in deposits. ...continues

MPC and Keynes

More Math In a closed economy, marginal propensity to consume is 0.6. If the economy opens up to the world and marginal propensity to import is 0.4, using the Keynesian model of output determination, the multiplier will: A) increase by half of its original value. B) decrease by half of its original value. C) decrea ...continues