Answer:
1. Monetary policy is the control of measure of money available in an economy and the channels by which new money supplied. By managing the money supply, a central bank aims to influence macroeconomic factors including inflation, the rate of consumption, economic growth, and overall liquidity.
2. By increasing the amount of money in the economy, the central bank encourages private consumption. Increasing the money supply also decreases the interest rate, which encourages lending and investment. The increase in consumption and investment leads to a higher total demand.
3. Prime rate on November 1st was around 7.5. The rate on October 29, 2008 is about 4.5. The pdf couldn't open so I used http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm/
4. The interest rates are decreasing from 7.50% in 2007 to 4.00% in 2008.
Money supply and interest rates have an inverse relationship. Where one goes up, the other goes down.The decrease in interest rates signifies that the money supply is growing.
5. The percentage get increasingly lower. As we see in the table, the change of consumption changes. In quarter 1, 2008
it is 1.0. In quarter 2, 2008 it is 0.6. In quarter 3, 2008 it is -0.7. In quarter 4, 2008 it is-1.9. Quarter 1, 2009
-1.8.Quarter 2, 2009 -2.2. Then around this time it gets better finally. Quarter 3, 2009. -0.9. Quarter 4, 2009 0.2. For change in investments it is as follows: Quarter 1, 2008, -3.3 Quarter 2, 2008, -7.3 Quarter 3 2008, -9.7 Quarter 4, 2008 -17.5, Quarter 1 2009 -26.3, Quarter 2, 2009 -28.5, Quarter 3, 2009 -24.0, Quarter 4, 2009 -9.6. Finally for Change in Gross Domestic Product it is as follows: Quarter 1, 2008 1.9, Quarter 2, 2008 1.2, Quarter 3, 2008 -0.3, Quarter 4, 2008 -2.8, Quarter 1, 2009 -3.8, Quarter 2, 2009 -4.1, Quarter 3, 2009 -2.7, Quarter 4, 2009 0.2. As we see everything goes down. Then around the 3rd quarter of 2009 it gets better.
6. The Change in Consumption, Change in Investments, and Change in Gross Domestic Product are increasing. Accordingly, GDP defined by the following formula: GDP = Consumption + Investment + Government Spending + Net Exports or more succinctly as GDP = C + I + G + NX where consumption (C) represents private-consumption expenditures by households and nonprofit organizations, investment (I) refers to business expenditures. Investments: the action or process of investing money for profit or material result. Consumption: the using up of a resource.
7. The trends are very different in 2008-2009 to the trends in 2010. The rates in 2008-2009 were increasingly going lower than subtly went up. In 2010 they get better rates. This happened because banks gave out too many loans to people who couldn't pay it. House loans specifically.
Explanation:
Whole project
