Macro Economics Assignment Example | Topics and Well Written Essays - 500 words - 1

Macro Economics - Assignment ExampleThe ECB is thinking of buying incarnate bonds as an option if it believes that more measures are needed to increase money into the European economy. Though such an idea does not seem to be imminent, investors snapped up stocks and sold the euro based on ECBs thinking.Investors are moved by signs that ECB is considering more policy measures to increase money in the European economy if online measures such as low interest puts, new bank lending induction as well as a program to buy situation types of debts fail to boost economic growth and inflation. Frances CAC 40 went up by 2.3 percent and Germanys DA rose by 1.9 percent. In the identical vein, Spanish stock rose by 2.4 percent and Italian stock went up by 2.8 percent.The ECBs current initiatives are geared toward adding money sum up to the economy by increasing the amount of assets on its books. ECB creates new bank reserves by printing money to purchase assets.The interpret below shows i n that location is a hang in money supplied in the European economy. The European Central Bank (ECB) has to put into play policy measures that will move the graph to the right as shown by the arrow. These measures include low interest rates, buying of corporate bonds as well as new bank lending facility which will add money to the economy and push the graph to the right in order to boost economic growth and inflation. The nominal interest rate must decrease to encourage the demand for money back to the equilibrium. It is worth to note that an decrease in the nominal interest rate will decrease the demand for savings and so increase the demand for money.Cox, Josie and Blackstone, Brian. European Stocks Jump as ECB Mulls Buying Corporate Bonds http//online.wsj.com/articles/european-stock-markets-edge-higher 1413878920?mod=WSJ_hp_LEFTWhatsNewsCollection (accessed October 21,