This week we are discussing the changes to the Federal Reserves monetary policy and its affect on things like investments, and government spending. Expansionary monetary policy increases the money supply in an economy. The increase in the money supply is mirrored by an equal increase in nominal output, or Gross Domestic Product (GDP). In addition, the increase in the money supply will lead to an increase in consumer spending. This increase will shift the aggregate demand curve to the right. In addition, the increase in money supply would lead to movement up along the aggregate supply curve. This would lead to a higher prices and more potential real output. Fiscal policy affects aggregate demand through changes in government spending and taxation. Those factors influence employment and household income, which then impact consumer spending and investment. Monetary policy impacts the money supply in an economy, which influences interest rates and the inflation rate. These policies help society have control over spending and what money goes out and what money goes in . Tight monetary policy is a central bank’s efforts to contract a growing economy by increasing interest rates, increasing the reserve requirement for banks, and selling U.S. Treasuries.
The Federal Reserve has monetary policies in place to maintain a balance in the economy. They set policies around inflation and unemployment. This has a direct effect on the Gross Domestic Product, which is made up of four components: consumption, investment, government spending, and net exports. When the interest rates increase, the cost of acquiring goods and services rise. When interest rates decrease, item costs decrease allowing for cheaper access to products. This is when consumption increases. Think loans. When interest rates are cheaper, money is easier to borrow, and the cost of borrowing is significantly cheaper. One example of this would be real estate deals. The Fed really attempts to keep things constant for the market’s sake.
When the economy is going well the Fed makes countercyclical monetary policies to increase the interest rates to pump the brakes on a rapidly changing booming economy. On the contrary, when the market is struggling the Fed makes countercyclical monetary policies to accelerate growth by lowering interest rates, and additionally through stimulus efforts. This appears to be an effective way of handling business cycle swings.
As a full-time bookkeeper, my job is to make any corrections to the general ledger accounts. Since I am responsible for accuracy of the funds, I would find it very hard that a co-worker would continue to record a cash receipt twice . The fact that this person would ask me to do them a solid by correcting the mistakes and offers you dinner for a payment in my opinion is sketchy. I know people make mistakes, the first time would be a mistake , the second time is questionable. It being my job to handle the books would put my own integrity into question. The accounts wouldn’t be accurate. If it came down the pipe that I reversed the mistake, it could be my job on the line. I also would not accept dinner for payment. It would make me feel like I was being paid back for doing something shady.
It would be best handled to correct the error the proper way and perhaps let the manager know so he or she is aware of the discrepency.
The first thing you should investigate is the cash receipts. The correcting entry should be addressed as soon as soon as the error is discovered. The reason for that is because if it’s not addressed as soon as possible there is a chance that will never get corrected. Dealing with the cash account you should create a new entry using the same accounts origin and I would say reverse the orders account. For example, if the entry was an accrual that was short $400, debit the expense account for an additional $400 and credit the accrual account for the same $400. Now far as accepting the dinner from the co-worker for fixing the mistake, I would not because of the screw up that person would continue to entice or try to bribe to cover up the screw up. By accepting the dinner could look like you are more involved than you are. If caught the first thing will be brought up is that I bought you dinner for correcting the mistake, so when asked of your involvement your name will be all over the corrections. The error needs to be made known to the proper people.
At this stage in the course, you should begin thinking about which form you will use to write your final creative work(fiction, nonfiction, screenplay, or poetry) . Consider the following questions to help jumpstart your thoughts:
Which writing track have you chosen?
Why did you choose it over the others?
How does it reflect your personal interests and style? Explain your reasoning.