The Federal Reserve

Money has three uses. Money is a medium of exchange, a unit of account, and a store of value. When used as a medium of exchange it is an item that buyers give to sellers when purchasing goods and services. When money operates as a unit of account it is considered the yardstick people with which people use to post prices and record debts. Finally, when money is used as a store of value it is an item that people can use to transfer purchasing power from the present to the future. Money is intended to expedite trade benefiting both parties participating. The use of money among individuals and societies seems to reflect that the ultimate purpose of money is to make life better. If it doesn't do that, it is being used incorrectly. Meanwhile, the function of money requires faith in its value. If the government prints too much money it can interfere with the proper functioning of currency and the economy. Money determines what prices are paid for goods and services, not the participants in trade or the market. So ultimately, the purpose of money, the bettering of life, can be impacted negatively.
The U.S. Federal Reserve System is responsible for regulating the size of our nation's money supply, the availability and interest rates of credit, and the foreign exchange value of currency. The central bank contracts and expands the money supply by adjusting the reserve requirement. Also acting as an agent of sorts for the government, issuing currency to be used as legal tender, supervising the operations of the commercial banking system, and implementing monetary policy. The most important way the central bank can affect the monetary base is by the changing the reserve requirements. Doing so can influence people to take out loans and finance projects they might not ordinarily have the resources to fund. They also influence the economy by increasing or decreasing the supply of money and credit. Today, central banks regulate the money supply by buying and selling assets such...