Federal Reserve

Federal Reserve
Donna McNeely
September 5, 2010
Jong Yi

Federal Reserve
          Money serves three key roles: a medium of exchange, Money helps bring ease and organization to our economy. People are agreeable to take exchange for the productivity they have produced and have accessible. A good example would be a farmer sells his crops for money and in turn he buys clothes, food, and car and so on. A unit of account or a standard of value, Money can be used as a general item so that prices of services and goods can be set. So if someone wants to buy a new car they don’t have to determine how much it will cost. Instead of having hundreds of different prices for a car one price is set in terms for goods and services. A store of value for future use Instead of spending it you can save it to use later. You don’t want to lose its acceptability just because you wanted to save it. People can also put their money into stocks or bonds to be able to save. Money helps our economy to work more easily. It makes the trading process easier. It helps us save for the future.
          The Federal Reserve System Is the Central Bank of the United States which manages the supply of money and credit. It also the center of the nation’s financial system. It keeps everything moving with money and payment services. They are bankers to the Feds. Providing services for Department of the Treasury. It also administers protection laws. Without a Central Bank role as a money manager, the nation's financial system would be diverse and matter of uneven growth as a result. Money and credit is the heart of the economy; they are hoping to create jobs, and business growth.
        One action the Federal Reserve has taken is to improve market functioning and to push long-term interest rates lower through its large-scale purchases of agency debt, agency mortgage-backed securities (MBS), and longer-term Treasury securities, of which the Federal Reserve currently holds more than $2...