Transcript rhetorical economic cycle

THE ECONOMY
THE ECONOMY
RHETORICAL ECONOMIC CYCLE
Conceptualized by: Jermaine Harris
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
w - Wages
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
w - Wages
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
w - Wages
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
w - Wages
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
Y - Nat’l Income
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
Y - Nat’l Income
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
In - Inflation
Y - Nat’l Income
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
In - Inflation
Y - Nat’l Income
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
r - Interest rates
In - Inflation
Y - Nat’l Income
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
r - Interest rates
In - Inflation
Y - Nat’l Income
Y - Nat’l Income
In - inflation
w - Wages
Un - Unemployment
r - Interest rates
RHETORICAL ECONOMIC CYCLE
Un - Unemployment
w - Wages
r - Interest rates
In - Inflation
Y - Nat’l Income
The Two Controlling Policies
 Monetary Policy - the process by which the Federal
Reserve Bank (the central bank) controls the supply of
money, the availability of money, and the cost of money
(interest rates), in order to attain economic growth and
stability
 Fiscal Policy - the use of government spending and
revenue collection to influence the economy
Ben Bernanke
Federal Reserve Board Chairman
How does the Fed control the
supply of money?
The Federal Reserve Controls The
Economy like a Mixing Board
controls sound
The Federal Reserve’s job is to monitor the Economy by balancing a
steady rate of Unemployment with a steady rate of Inflation. All while
promoting steady economic growth. Too much Unemployment or high
Inflation changes the soundness of our economy to a level that is
dangerous or unacceptable. By adjusting the 4 knobs on the Mixing
Board, the Fed attempts to maintain Economic soundness.
The four mixing board knobs are
1
2
3
4
Reserve requirements
Federal Funds Rate
Discount Rate
Open Market Committee
Operations
The Lotto-Ball Distributor
The Lotto-Ball Distributor
Represents money in the system
A. The Reserve
requirement is
adjusted to change
the level of money
circulating in the
system. The main
purpose of this
reserve is to make
sure the banks have
money on hand for
withdrawal request.
If they don’t people
may panic and
create a run on the
banks.
C. By removing money
from the economy the
value of the dollar changes.
B. By putting money in the
system the value of the
dollar changes.
D. Air pressure creates
different levels of Velocity.
Rate at which $ circulates
in the economy.
The Lotto-Ball Distributor
Represents money in the system
A. The Reserve
requirement is
adjusted to change
the level of money
circulating in the
system. The main
purpose of this
reserve is to make
sure the banks have
money on hand for
withdrawal request.
If they don’t people
may panic and
create a run on the
banks.
C. By removing money
from the economy the
value of the dollar changes.
B. By putting money in the
system the value of the
dollar changes.
D. Air pressure creates
different levels of Velocity.
Rate at which $ circulates
in the economy.
The Lotto-Ball Distributor
Represents money in the system
A. The Reserve
requirement is
adjusted to change
the level of money
circulating in the
system. The main
purpose of this
reserve is to make
sure the banks have
money on hand for
withdrawal request.
If they don’t people
may panic and
create a run on the
banks.
C. By removing money
from the economy the
value of the dollar changes.
B. By putting money in the
system the value of the
dollar changes.
D. Air pressure creates
different levels of Velocity.
Rate at which $ circulates
in the economy.
Teeter Tauter
Inflation vs. Unemployment
Inflation
Unemployment
The Money Multiplier
 Every bank is required to hold




10% of all deposits in a cash
reserve.
The reserves are to be
available for withdrawals.
This is to prevent panic and a
bank rush.
In the U.S., only about 3% of
the total money supply
consists of physical coins and
paper money.
For Example: if the reserve
requirement is 10%, for every
$100 this creates a total of
$1000 ($100 / 0.2) in deposits.