Eco212 U.S. Federal Reserve Monetary Policy

U.S. Federal Reserve Monetary Policy
Terra Roberts
March 27, 2010
Stephen Keels
U.S. Federal Reserve Monetary Policy
      Money is the main source used for trading for goods and services in the nation one lives in. I want to discuss how money is used and what it does to help the economy.   I want to explain how the central bank manages our nation’s monetary system, and what the most recent report from The Federal Reserve is as well as the expected outcome from the latest observation. Finally, I want to explain how the monetary policies are affecting the economy today in production and employment levels. APA format doe not allow the use of “I”.
Purpose and function of money
      Money is the set of assets in the economy that people regularly use to buy goods and services from other people (Mankiw, 2007, p 642 para-5). Money is an easy way to trade if one wants to purchase a good and not exchange a good or service for the product desired. It is the use a piece of currency or money in exchange for the good or service.   Money is necessary for our economy to function. According to Mankiw, the three functions of money are money a medium of exchange, a unit of account, and a store value.   A medium of exchange occurs when the consumer gives the producer money to receive there good or service. A unit of account occurs when a record is used to keep accountability for one’s money. A store value occurs when a producer of a good or services holds money from which a consumer gave him or her for there good or service to at a later time to use for a medium of exchange for him or herself on a good or service. This is a good discussion of the functions of money.
      Central Bank manages nation’s monetary system
      The Federal Reserve is the central bank system of the United States. It is “an institution designed to oversee the banking system and regulate the quantity of money in the economy” (Mankiw, 2007, p 648 para-2).   Our nation needs a money manager...