banking system which comprises of twelve Federal Reserve banks, with each serving member banks located in their own district. The Reserve system often possesses broad regulatory powers in relation to monetary policy. Monetary policy…
Download file to see previous pages...
This system allows for control of discount rates in the various district banks thereby protecting consumers. In addition, the system can be able to control money supply through easing the monetary policy through sale of financial assets to increase money supply. It can also tighten monetary policy through selling financial assets hence reducing money supply. Control via the Federal Reserve System is hence greater in terms of money supply to the economy.
The Federal Reserve System monetary policy often influences the levels of spending, prices and employments through a number of means. The Reserve System main goal entails regulating money supply in the economy in order to keep unemployment and inflation low plus to promote steady economic growth.
In case of inflation, purchasing power of people reduces and leads to more unemployment in a given economy. The Federal Reserve System in such instances often increases discount rates accorded to banks in an attempt to reduce the money supply in a given economy. It can also reduce money supply through buying of government bonds.
In an attempt to increase spending and employment in a given economy, the Federal Reserve System often lowers the interest rates it gives to various banks. This hence results in people remaining with more money hence increasing spending. When more people spend money in buying goods and services, indicates that producers will concentrate in producing goods and services thereby creating more employment
...Download file to see next pagesRead More
Reacting To Falling Oil Prices and the Global Economic Downturn 5. The Hidden Energy Crisis 5.1 Overview 5.2 Saudi Arabia Consumption Problem 5.3 Impact on the International Oil Market 5.4 Escalating Demand and Social Insecurity 5.5 The Role of Energy Prices 5.6 The Cost to Society 6.
This recession made the federal government under the leadership of president Obama to come up with a stimulus package program in the year 2009. The package was commonly known as fiscal policy and it was focusing at economic stimulation via financing government project to create direct employment opportunities.
Monetary policy on the other side refers to actions that can be taken by the central bank to either slow or ignite the economy. Both Fiscal and monetary policies have a way of affecting the economy either positively or negatively. With reference to the
The country had to contend with a cut of roughly 85 billion USD to in a bid to sequester the government’s debt. The country also adopted a policy to the effect that wealthy Americans will have to pay even more
The government uses this policy in affecting the economy. When a state experiences recession, the government might lower tax rates to fuel economic growth. If the people pay their taxes, they have the money to spend or invest and with increased consumer spending, an
This has forced the US government to initiate a series of measures aimed at rectifying the debt burden of the United States. One such measure is the creation of a committee responsible for finding ways to solve the debt deficit problems of United States. This committee
f whether the program has anything to contribute towards the direction of the economy declined to it having much contribution stating that the view of Fed in the economy is concerned about what has been for some time. He views this as being middling. He notes in relation to
ends up by cutting on the amount of tax it charges, people will tend to increase their rate of spending hence allowing them to buy more imported goods and service, hence increasing the rate at which the government borrows funds from financial institutions in other countries as
This model analyses the supply of goods and services a nation can produce in a given period and the corresponding amounts of goods and services that will be purchased at all possible levels. The Fiscal policy
2 Pages(500 words)Assignment
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Assignment on topic Fiscal Policy for FREE!