This assignment requires that you answer the questions. Your posting should be at least 150 words. Your posting is graded based upon your ability to relate the courses material to the topic under discussion, the level to which you support your point with specific examples and your writing. Discussion Boards are not a place to over generalize, vent, use informal writing or use language not appropriate for a professional environment.
- Explain the logic underlying the law of one price and the theory of purchasing power parity.
- How will a decrease in the federal government’s budget deficit affect the equilibrium interest rate in the bond market? Explain using the bond demand and supply framework.
- Distinguish between adverse selection and moral hazard.
- What are a bank’s major sources and uses of funds?
- Describe the structure and responsibility for policy tools in The Federal Reserve System
- Describe what criteria is applied when choosing a policy instrument.