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In Terms of Desirable Features of a Monetary Policy Instrument

question 9

Essay

 In terms of desirable features of a monetary policy instrument, explain why the size of the staff at the Fed is not a good policy instrument. Be sure to address which feature(s) it fits and which one(s) it doesn't. 


Definitions:

Self-Liquidating Debt

A type of short-term loan that is used to finance a project or inventory that will generate enough income to pay back the loan.

Spontaneous Financing

Financing that arises naturally from the normal operation of a business, such as trade credit from suppliers.

Seasonal Working Capital

Additional funds a business may need at certain times of the year to manage increased operational activities.

Clean-Up Requirements

Environmental or legal directives that mandate the remediation of pollution or contaminants from a site.

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