Economics Research Paper Example | Topics and Well Written Essays - 750 words

Economics - Research Paper Example For instance, a reduction in the target federal funds rate by the Federal Open Market Committee is quite likely to lead towards a fall in the short term interest rates which are mostly charged on commercial papers and treasury bills among other financial products (Federal Reserve Bank of Richmond, 2012). The short term interests are affected not only by the current federal funds rate but also by the expected overnight changes in the rates (Board of Governors of the Federal Reserve System, 2011). The influence of federal fund rates on the interest rates has been shown in the figure below: Source: Money Cafe (2012) In addition, the changes in the federal funds rate also have certain noteworthy effects on the foreign exchange rates within an economy. For instance, if the fund rates increase in the United States, investing in dollar assets may seem to be more favourable, which in turn may result in the increase of the value of dollar in the foreign exchange market (Board of Governors of the Federal Reserve System, 2011). Furthermore, the Federal Reserve plays a vital role in setting up the monetary policies for a nation which includes the setting up of reasonable long-term interest rates as well. ... One of the major functions of the Federal Reserve is to control the money supply and credit supply in the economy in order to support the economic goals of a nation (Federal Reserve Bank of Richmond, 2012). Likewise, the increase in the federal funds rate might also cause the short term interest rates to rise. This can further lead the business houses and the customers to reduce their expenditures causing a decrease in the economic activities and leading to a fall in the employment rate (Modeste & Mustafa, 2002). A reduction in the in the interest rates of Federal Reserve is likely to result in the decrease in income and output level of the economy. The ‘contraction policies’ implemented by the Federal Reserve is mainly focused on controlling the cumulative demand in an economy. These ‘contraction policies’, have often been observed to lead towards a decrease in the aggregate supply of money within the economy. This results in an increase in the interest rat es which eventually decreases the investment level within an economy leading towards a substantial fall in the overall output level (Khawaja, 2012). The following diagram illustrates the influence of federal funds rate fluctuations on the output gap: Source: (Bivens, 2012) The federal fund rates have significant effect on inflation as well. A decrease in the federal fund rates is likely to result in an increase in the demand for goods and services. This increase in demand for commodities in turn enhances the employment opportunities for labours and requirement for raw materials for the production purpose (Board of Governors of the Federal Reserve System, 2011). This aspect can be evidently observed from

Arab-Israeli Conflict Essay Example | Topics and Well Written Essays - 1000 words

Arab-Israeli Conflict - Essay Example The first conflict between the two nations, known as the first Arab-Israeli War, started on May 15, 1948, when five Arab armies invaded the one-day- old Jewish state. "The war was fought along the entire, long border of the country: against Lebanon and Syria in the north; Iraq and Transjordan - renamed Jordan during the war - in the east; Egypt, assisted by contingents from the Sudan - in the south; and Palestinians and volunteers from Arab countries in the interior of the country. It was the bloodiest of Israel's wars. It cost 6,373 killed in action (from pre-state days until 20 July 1949) almost 1% of the yishuv (the Jewish community)" (Lorch 2003). Therefore, the War of Independence in 1948 was the most destructive wars that the two nations ever fought and it did not mark the end of the Arab-Israeli conflict, although the war came to an end with the 1949 Armistice Agreements. The 1948 Arab-Israeli War, which was fought between the newly declared State of Israel and its Arab neighbours, has been known in different names, and the Israelis call it as the War of Independence or War of Liberation while the Arabs name it as the Catastrophe. The United Nations made an important decision to partition Palestine into an Arab state and a Jewish state on Nov. 29, 1947, and the war broke out following the withdrawal of the British force from the region. "Mounting violence leads to the first Arab-Israeli war in early 1948, when the British withdraw from the region. Jewish forces hold their ground and declare Israeli statehood on May 14, 1948. Neighbouring Arab nations, including Syria, Lebanon, Iraq, Egypt and then-Transjordan, lend support to the Palestinians. The Egyptians are the last to seek an end to hostilities; an armistice is reached in January 1949." (The Arab-Israeli conflict, 1947-present). Therefore, various nations such as Israel, Palestine, and other nei ghbouring Arab nations, including Syria, Lebanon, Iraq, Egypt etc took part in the war of 1947. In fact, the fighting had started long before long before the actual date of the war between local Jews and local Arabs who were supported by volunteers from neighbouring states such as Syria, Lebanon, Iraq, and Egypt. Significantly, it was the bloodiest of the seven wars that the Israelis had fought in the region and around 6,000 Jews were killed in the war, which is almost 1 per cent of the country's Jewish population at the time. "It was also the last time Israel found itself facing an opposing force that did not overwhelmingly outnumber its own. Between 35,000 to 45,000 Israel soldiers were pitted against 42,000 to 54,0000 troops from the Arab countries." (Background: The 1947 - 1949 Arab-Israeli War). Therefore, the 1948 Arab-Israeli War was the most destructive war among the various wars belonging to the Arab-Israeli conflict. The war which was fought in four phases came to an end o n February 24, 1949, when the Israel troop and Egypt signed an armistice agreement that was followed by similar agreements with Lebanon on March 23, 1949, with Jordan on April 3, 1949 and with Syria on July 20, 1949. Thus, the 1948 Arab-Israeli War ended without great lose to the Israeli side which was established as a sovereign state in 1948. Another