1. Conduct researchon the web regarding a recent U.S.Federal Reservecontractionarymonetary policy action.
2. Describe how the article you read for this post relates to the U.S. Federal Reserve and monetary policy.

- The contractionary policy involves the federal reserve selling government securities to halt inflation. New Zealand economy implemented a policy similar to the U.S reserve. This policy prevented the housing economy to experience inflation, negatively effecting the economy as a whole. (Powell) Similar to the U.S. reserve, New Zealand sold securites to decrease the level of loan resources available to the bank. This gesture slowed the inflation threat quickly.

3. Choose a company that you would like to apply this policy to, and describe the company, its primary markets, and its business model (how it makes money).

- The company I decided to apply the contractionary monetary policy. Nike routinely utilizes the mass marketing business model in regards to their products. This strategy gives the company the ability to market their product without preferential treatment to their customers. This indifferent stance, unfortunately, doesn't give Nike the luxury to use a uniform pricing strategy on their products. This is largely due to their massive diverse consumer base. Nike's revenue is heavily dependent on retail shoe stores that resell their products. Nike also has a home website to distribute their products to consumers. Nike's primary markets are between the ages of 15-40. The company puts an increased focus on tween to facilitate brand loyalty.

4. What macroeconomic and microeconomic results could occur as a result of this policy?

- The contractionary monetary policy would have a big effect on the macroeconomic and mircoeconomic factors regarding Nike. For example, the federal reserve selling security purchases will cause Inflation can affect the scaling efforts of Nike immensely. For example, the rise in overall expenses can damper the company's investment efforts to expand their enterprise. These restraints from inflation can also have an adverse affect on the consumers due to the rise in product prices. The monetary polic could also effect the overall national income.

The overall income level of the world can have a huge effect on the scaling aspirations of Nike. A fleeting income of a household can deter a consumer from purchasing Nike's products. These obstacles prevent the company from exceeding revenue expectations. The decrease in revenue can potentially cause a great deal of layoffs, negatively affecting the company.

5. How would this policy affect you as a business manager for the company you chose, in your decision making related to economies of scale?

- Economies of scale is defined as the average cost of producing each individual unit declines as total output increases. (Greenlaw p.23)The contractionary monetary policy could have a sizeable affect on this aspect. As the business manager, The restricted banks funds will give the company less resources to invest into specialization. This could potentially negatively effect the overall unit price per product. The contractionary monetary policy will give Nike few opportunities to focus their efforts on making the shoe production process more efficient. This would've been achieved by hiring highly qualified engineers. The engineers enlisted will be specialized in the lean manufacturing process. This could've gave the company the opportunity to automate the shoe making process, eliminating the need for an excessive workforce. The reduction in the workforce will result in an decrease in revenue for the company.

6.How would this policy affect you as a business manager for the company you chose, in your decision making related to your business market opportunities?

-The contractionary monetary policy would stall me as the business manager to further expand the company's market share. The restricted funds provided by the bank will give us few resources to invest in new production facilities. These facilities would've allowed the company to maximize the economies of scale by decreasing the overall unit production price. The newely allocated funds would've been utilized in advancing the product technology of Nike.

Reference

Greenlaw, S. and Shapiro, D. (2019). Principles of Economics, 2e. Houston, TX:OpenStax- Rice University. Retrieved fromhttps://openstax.org/details/books/principles-economics-2e

1. How would thispolicy affect you as a business manager in your decision makingrelated toother areas related to the pursuit of the company's economic self-interest?
2. How could thispolicy affect the company's ability to pursue:

• Strategic partnerships?
• Competitive pricing strategies?
• High-risk ventures?
• Talent acquisition?