Use the map to answer the following question. Federal Reserve Districts BOTON 12 New Yorr Cco S FRNCSCO 10 KANBAS CTY ST. LA 8 ATLNTA 11 DALLAS ALASKA HAWA Which statement is accurate based on the map? O A. The twelve federal reserve district banks set monetary policy through the Board of Governors. O B. Regional member commercial banks work directly with the twelve federal reserve district banks. O C. American consumers deposit money directly into the federal reserve district bank for their region. O D. The Board of Governors is not able to supervise and regulate member commercial banks.
IS-LM-PC Analysis
The IS (Investment Saving), LM (Liquidity Preference- Money Supply), and PC (Philips Curve) is the model that looks at the dynamics of output and inflation. It takes into account the central bank policy decision to adjust the inflation and real interest rate in the economy. It enables the economist to weather to priorities between employment and inflation rate analyzing the model. It is a practice-driven approach adopted by economists worldwide.
IS-LM Analysis
The term IS stands for Investment, Savings, and LM stands for Liquidity Preference, Money Supply. Therefore, the term IS-LM model is known as Investment Savings – Liquidity preference money Supply. This model was introduced by a Keynesian macroeconomic theory which shows the relationship between the economic goods market and loanable funds market or money market. In other words, it shows how the market for real goods interacts with the financial markets to strike a balance between the interest rate and total output in the macroeconomy. This particular model is designed in the form of a graphical representation of the Keynesian economic theory principle. The output and money are the two important factors in an economy.
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