in what ways can the government effect the economy?

Question

full answers please

Answer 1

By selling bonds, government reduces the quantity of money that circulates on markets. This helps fight inflation.

On the other hand, buying bonds raises the quantity of money and stimulates economy (and inflation).

Government may also create a new tax on import/export to affect the value of its currency.

Answer 2

They can print more money, which makes it less valuable, which increases inflation. OR they can NOT print anymore money, which means that the money that is out 'there' will become rarer and more valuable, but it will slow the economy down.

The Federal Reserve Board (Fed) can also change something called the discount rate. That is a interest rate at which it loans (huge quantities of) money to banks. If the discount rate goes up, then the banks will charge more money for loans to you and I, and businesses. That will tend to slow the economy down because I don't want to take out a high interest rate loan to buy a car, now, and the car dealer won't get his commission, etc...

The Fed can also change the amont of money banks MUST keep on deposit. By law, a certain portion (about 5%) of the money any bank has, must be kept in Federal Reserve vaults, as a "reserve" (that's why it's called the Federal "Reserve"). This also affects the amount of money "out there", and supposedly doesn't mess with inflation like printing more money would -- but now we're getting in to some pretty complex things; not for this answer box.

.

Answer 3

The government needs to stop driving families into bankruptcy by use of child services and it's related interest groups because it affects the community, state, and nation as a whole.

Allowing for frivolous lawsuits obviously has a huge impact.

Wishy washy laws or time spent on the same.

There should be zero tolerance for wasteful spending. Therefore, monitoring systems should be top priority it's our money.

The government generates funds - using people - thru the mental health programs resulting in payment back to itself. Fixed documentation proves that.

~~~~~vote w/wisdom~~~~~

Answer 4

interest rates,cost of realist-ate,foreclosure the need on state assistant disability ssi u name it they effect it