1. As more people use debit cards and credit cards and it becomes more expensive to print money--many are advocating that we get rid of hard currency and simply use cards to transfer value. Currently, government transfers such as welfare and unemployment insurance are based on debit-card disbursements. What are the advantages of such as system? What are the disadvantages? Would you prefer us to go this route in the future? Why or why not?
2. Explain how the Federal Reserve uses each of the three tools at its disposal (reserve requirement, discount rate, and federal funds rate to control the money supply and monitor the economy.
3. The Federal Reserve was set-up to be a non-political entity that cannot be influenced by Presidents, Congress, or state governments. Consequently, the members serve 14-year terms and the Fed's chairmen's term overlaps with that of the U.S. President. Considering that different parties have different economic views, and the need for government to be on the same page in an economic crises at times, should the U.S. continue this term structure of the Fed, or should every new president be allowed to bring in their own Fed approved by Congress? Defend your answer. Include at least two positive effects of your position and two negative effects of the opposite position.
2. Explain how the Federal Reserve uses each of the three tools at its disposal (reserve requirement, discount rate, and federal funds rate to control the money supply and monitor the economy.
3. The Federal Reserve was set-up to be a non-political entity that cannot be influenced by Presidents, Congress, or state governments. Consequently, the members serve 14-year terms and the Fed's chairmen's term overlaps with that of the U.S. President. Considering that different parties have different economic views, and the need for government to be on the same page in an economic crises at times, should the U.S. continue this term structure of the Fed, or should every new president be allowed to bring in their own Fed approved by Congress? Defend your answer. Include at least two positive effects of your position and two negative effects of the opposite position.