You are a junior executive of a new cellular phone carrier called Technologies of the Future (TOF) that competes in the same market as Verizon Wireless, AT&T, and T-Mobile. You are asked to write a professional document that discusses the concepts below.
- Define the goals and objectives of the Federal Reserve.
- Identify the four monetary policy tools used by the United States and explain which monetary policy tool would influence the sale of smartphones in the U.S.
- Discuss the difference between expansionary monetary policy and contractionary monetary policy.
- Explain how expansionary monetary policy would lead to an increase in the sale of smartphones.
- Explain the difference between the M1 and M2 money supply.
- Identify whether an increase in the M1 or M2 money supply would lead to an increase in the sale of smartphones.
- Explain how higher interest rates and inflation would affect the sale of smartphones in the United States.
- Describe the two fiscal policy tools used by the federal government.
- Discuss the difference between expansionary fiscal policy and contractionary policy.
- Which fiscal policy tool has the greatest influence over the sale of smartphones in the United States and why?
- Discuss the difference between expansionary fiscal policy and contractionary policy.
