Fedrial
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- Category: Politics: Economics
- Date Submitted: 04/21/2010 08:24 PM
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Federal Reserve
Michael Sislian
University of Phoenix
Federal Reserve
The Federal Reserve is the central bank of the United States of America. It is owned both publicly and privately, and is comprised of a number of different branches, which work together to control the supply of money in the in the United States. The Federal Reserve plays a key role in the United States in many ways one is interest rates and laws on how banks need to operate.
Function of Money
The purpose of money is for a medium of exchange for goods and services. The function of money throughout the world is to devise an artificial value as medium used to evaluate a service or goods. Typically the value of money can be set by government, gold, or market conditions. The central bank of the United States manages the nation's monetary system by either increasing or decreasing the monetary supply which in essence can increase or slow down inflation, affect interest rates, and control the rate in which goods and services increase in evaluation in relation to one another.
Central bank manage the nation's monetary system
The central bank manages nation’s monetary system in several ways; one of the ways is by controlling the money demand which affects interest rates and inflation. This is done by decreasing money supply when inflation is high and increasing the money supply when interest rates are too high. The central bank influences this interest rate through these two tools of monetary system, discount rate, and reserve requirements. Discount rate is the rate banks are charged for loans received from the Central Bank. “The reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities” (FED Reserve).
Monetary policy in the United sates
As of march 16, 2010 that central bank has released the following monetary policy. Unemployment rate are decreasing and economic activity has...
Michael Sislian
University of Phoenix
Federal Reserve
The Federal Reserve is the central bank of the United States of America. It is owned both publicly and privately, and is comprised of a number of different branches, which work together to control the supply of money in the in the United States. The Federal Reserve plays a key role in the United States in many ways one is interest rates and laws on how banks need to operate.
Function of Money
The purpose of money is for a medium of exchange for goods and services. The function of money throughout the world is to devise an artificial value as medium used to evaluate a service or goods. Typically the value of money can be set by government, gold, or market conditions. The central bank of the United States manages the nation's monetary system by either increasing or decreasing the monetary supply which in essence can increase or slow down inflation, affect interest rates, and control the rate in which goods and services increase in evaluation in relation to one another.
Central bank manage the nation's monetary system
The central bank manages nation’s monetary system in several ways; one of the ways is by controlling the money demand which affects interest rates and inflation. This is done by decreasing money supply when inflation is high and increasing the money supply when interest rates are too high. The central bank influences this interest rate through these two tools of monetary system, discount rate, and reserve requirements. Discount rate is the rate banks are charged for loans received from the Central Bank. “The reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities” (FED Reserve).
Monetary policy in the United sates
As of march 16, 2010 that central bank has released the following monetary policy. Unemployment rate are decreasing and economic activity has...