ECON312 Monetary Policy and Federal Reserve

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ECON312 Monetary Policy and Federal Reserve
What is the Federal Reserve (Fed) all about? Which Federal Reserve District Bank…

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ECON312 Monetary Policy and Federal Reserve

ECON312 Monetary Policy and Federal Reserve

Discussions Week 6 All Students Posts – 46 Pages 

What is the Federal Reserve (Fed) all about? Which Federal Reserve District Bank is closest to you? Who is the current Chairman of the Fed? Should the Fed remain independent from political authority or should the President and Congress have a say in their operations? Why? Why not? What is FOMC? What is the current Federal Funds Rate? How does the Fed implement monetary policy to manage the economy? At the last meeting of the FOMC, what was done to the federal funds rate–increased, decreased, or no change from previous meeting? Given the current state of the U.S. economy, should the Fed be using expansionary monetary policy or contractionary monetary policy? Why? Why Not?

Expansionary policy, or expansionary monetary policy, is when the Federal Reserve uses tools at its disposal in order to increase the money supply for the purpose of stimulating or growing the economy.
An expansionary policy is typically implemented by the Federal Reserve by enacting one or more of these tactics:

Lowering the federal discount rate:
By lowering the discount rate, the fees it charges banks to borrow from it, the Fed seeks to lower overall interest rates, thereby lowering the cost of money and its availability.

Lowering reserve requirements:
Reserve requirements are the amount of money banks must keep in reserve.  Lowering these reserves enables banks to have more money available to lend and invest…