ECON 3703 – Money and Banking
Exam IV – Take home
• This assignment is due at the beginning of class on Tuesday of the very last regular week of class
• Summarize the following articles.
• Use electronic means [preferably with WORD] to answer the following questions.
• Graphs, charts and tables may be included on a free-hand basis.
• Use one-inch margins and 12 font.
• Be sure to write the Roman numeral Question and the name of the articlc(s) (underlined) before answering.
• Do not write on back of paper.
• Start each question on a separate page.
• Attach this sheet [that means staple] to the front of your answers in sequential order)
• Failure to complete this assignment on lime will result in severe penalties
• Neatness and correct form arc just as important as the thoroughness of your answers
• Do not attach articles to your answers
The following question is based on the article, “Why are interest rates so low?” by ben Bemanke According to the author why are interest rates so low? In addition to your verbal exposition, be sure to use both the loanable funds and liquidity preference interest frameworks to analyze this question.
The following question is based on the article, “The Costliest Mistake In All Of Economics” by Joe Weisenthal:
The world’s most famous bond manager, Bill Gross, was forced to send out an apology to investors over his dismal performance in 2011. Using all of the analytical devices (graphs, equations, identities, etc.) presented in this class, explain his mistake [However, you do not need to use the Charts used in the article to answer this question].
The following question is based on the article: “How the Fed controls Interest Rates” by James Hamilton, Mar27 2017.
The way the FED controls interest rates today is completely different from the way things worked over 10 or so years ago. Explain thoroughly.