Contradictory Effects of Monetary and Fiscal Policies on the Economy of Usa

CONTENT 1. INTRODUCTION 3 2.MONETARY AND FISCAL POLICIES OF THE USA 3 3.REASONS FOR CONTRADICTORY CONSEQUENCES 5 4.IMPACT ON THE BANKING SYSTEM 7 5.IMPACT ON CITIBANK 8 6.RECOMMENDATIONS 9 7.CONSEQUENCES 10 8.REFERENCES 11 ? EXECUTIVE SUMMARY The global economic downturn, the sub-prime owe fiasco, investment bank collapses, falling shares and home prices, and closelipped reliance pushed the linked States into a recession by residuum 2007.In response to which the Federal appropriate, Treasury, and Securities and Exchange Commission responded with unprecedented , monetary indemnity expansion, fiscal stimulus and financial institutional bailouts intended to score employment, promote investments and combat slumping consumer spending. However these policies have had useful as well as contradictory results in their outcomes. The following draw discusses various monetary and fiscal policies, reasons for the contradictory consequences ,impact of these policies on the banking orbit for e.g. how banks started hoarding and investing money in securities instead of lending out to businesses, and how Citibank in particular has been impacted.

The report concludes with a round of recommendations to address the challenges of debt management, dismal unemployment rate and the crisis of the banking sector. 1 INTRODUCTION The global economic downturn, the sub-prime mortgage fiasco, investment bank collapses, falling shares and home prices, and tight credit pushed the United States into a recession by end 2007.(National Bureau of Economic Research ). Figure 1 United States GDP Growth Source : CIA World Book concomitant Sheet As shown in figure 1,the GDP rate started to send packing in 2007 ,and by Jan 2009 it had slumped to -6.40 .Unemployment rate also reached a dumfounding 10% thus forcing Government and the central banks Federal Reserve to respond with... If you want to get a full essay, rig it on our website: Orderessay

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