How does increasing the money supply or decreasing loans

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Case Study: At this point in the class, the economic viewpoint was for one country compared to another country's production. However, using the concept of scarcity, we must account for all world production, all businesses, and all consumers/customers. This concept is called aggregate, or the sum-total of all production in the world. In Chapter 13, other factors contribute to balancing the spending and revenue of a country. Thus monetary and fiscal policies are necessary to regulate how much is collected in taxes, how much is spent in the budget, and how much a country has to borrow in debt since spending often outpaces collection. Further, in Chapter 14, the concepts shift to the economy's distribution of money.

Questions: Expand on the following points for this discussion question:

1. Write one paragraph discussing the categories of Money and why banks need to regulate loans to reduce risk.

2. Write one paragraph examining how the aggregate short-term compared to the long-term cause the shifts from recession to expansion and back to recession.

3. Write one paragraph reflecting upon the Federal Reserve Banking System and what controls must influence the contraction or expansion of the economy. How does increasing the money supply or decreasing loans regulate the state of the economy?

Reference no: EM133412520

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