Federal Reserve
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- Date Submitted: 10/26/2010 02:26 PM
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Federal Reserve Paper
This paper will contain in particularize the purpose and function of money, how the central bank manages the monetary policy, the direction of the current monetary policy, what action the Federal Reserve has taken to head in the certain direction, and the effects of monetary policies on the economy’s production and employment.
Money is a commodity that is utilized around the world. It is used to purchase goods and services such as a house, food and purchase medication among other products. Principally, money operates as a medium of exchange. Money was established and developed in order to make possible the purchasing and selling of both products and services. In today’s society, money has additionally become a standard measure pertaining to the worth of wealth for both private individuals and businesses (Data Limitations and the Fragmented U.S. Financial Regulatory Structure Challenge Federal Oversight and Enforcement Efforts, 2009). The Central Bank, which additionally comprises the Federal Reserve, is in charge of handling, organizing, and managing the monetary within the United States through the utilization of numerous methodologies and tools. Firstly, the Federal Reserve’s fund interest rate radically affects the grand total amount of existing and accessible money within the system. As a general rule, if the interest rate is high, the amount of money that is accessible is typically low. When it comes to the higher reserve requirement, there is a requisite for financial institutions to deposit with the Federal Reserve, which in turn, additionally affects the amount of money which is accessible for lending purposes, as this typically lowers that amount (Mark, 2009). When it comes to an open market operation, the Federal Reserve has the ability to both purchase and sell Unites States Treasury within the market in order to calculatedly affect the amount of money which is accessible in the system.
The purpose and...
This paper will contain in particularize the purpose and function of money, how the central bank manages the monetary policy, the direction of the current monetary policy, what action the Federal Reserve has taken to head in the certain direction, and the effects of monetary policies on the economy’s production and employment.
Money is a commodity that is utilized around the world. It is used to purchase goods and services such as a house, food and purchase medication among other products. Principally, money operates as a medium of exchange. Money was established and developed in order to make possible the purchasing and selling of both products and services. In today’s society, money has additionally become a standard measure pertaining to the worth of wealth for both private individuals and businesses (Data Limitations and the Fragmented U.S. Financial Regulatory Structure Challenge Federal Oversight and Enforcement Efforts, 2009). The Central Bank, which additionally comprises the Federal Reserve, is in charge of handling, organizing, and managing the monetary within the United States through the utilization of numerous methodologies and tools. Firstly, the Federal Reserve’s fund interest rate radically affects the grand total amount of existing and accessible money within the system. As a general rule, if the interest rate is high, the amount of money that is accessible is typically low. When it comes to the higher reserve requirement, there is a requisite for financial institutions to deposit with the Federal Reserve, which in turn, additionally affects the amount of money which is accessible for lending purposes, as this typically lowers that amount (Mark, 2009). When it comes to an open market operation, the Federal Reserve has the ability to both purchase and sell Unites States Treasury within the market in order to calculatedly affect the amount of money which is accessible in the system.
The purpose and...