There are three instruments of monetary policy that the Federal Reserve uses; open market operations, the discount and federal funds rates and the reserve requirements. ... The first tool the Federal Reserve uses is open market operations (OMO) to influence the supply of bank reserves. ... This rate is higher than the federal funds rate because the Federal Reserve wants to discourage excessive borrowing. ... The required reserve ratio is a percentage of deposits that the Federal Reserve requires each bank to keep on hand. ... If the Federal Reserve lowers the reserve ratio, it encourages econo...

• Word Count: 1047
• Approx Pages: 4

Today, there are four main roles that often fall within the workings of the Federal Reserve (The Federal Reserve Board, chapter 1). ... In terms of the general structure and makeup of the Federal Reserve, it is composed of a Board of Directors that are located in Washington DC, along with twelve regional Federal Reserve banks that tend to oversee the banks that fall under their respective region al jurisdiction. ... At the same time, the Federal Reserve also ensures that it is able to keep in check the open market operations and it achieves this inherent goal through the Federal Open Market C...

• Word Count: 856
• Approx Pages: 3
• Has Bibliography
• Grade Level: Graduate

The Federal Reserve System - A central bank is an institution that oversees and regulates the banking system and controls the monetary base. ... Responding to Banking Crises: The Creation of the Federal Reserve - In 1913 the national banking system was created as a way to compel all deposit taking institutions to hold adequate reserves and to open their accounts to inspection by regulators... The Structure of the Fed - Two parts: the board of Governors and the 12 regional federal reserve banks - One of the jobs of the federal reserve banks is to audit the books of private sectors to ensur...

• Word Count: 858
• Approx Pages: 3
• Grade Level: High School

In this unit, we learn that the Federal Reserve is another important player in the government operation to balance out monetary expansion. ... If the Federal Reserve increases the reserve requirements, the money supply decreases. ... Interest the Federal Reserve charge member banks for overnight borrowing is known as the discount rate. ... Open Market Observation is the most direct method the Federal Reserve has to effect monetary policy. ... The Monetary Policy of the Federal Reserve combined with the governments Fiscal Policy is often what is credited with keeping American from another reces...

• Word Count: 372
• Approx Pages: 1
• Grade Level: Undergraduate

The Federal Reserve under the Depository Institutions Deregulation and Monetary Control Act of 1980 sets the reserve requirements. ... Supply of Reserves The Federal Reserve supplies reserves to the banking system in two ways: Lending through the Federal Reserve discount window Buying government securities (open market operations). ... When the Federal Reserve buys securities in the open market, it creates reserves to pay for them, and the supply of non-borrowed reserves increases. ... In other words, the Federal Reserve adjusts the supply of non-borrowed reserves by purchasing or selling se...

• Word Count: 4049
• Approx Pages: 16
• Grade Level: Undergraduate

In order to counter the trend, the government and Federal Reserve could use fiscal and monetary policies to intervene the economy. ... There are three tools that the Federal Reserve could use for a tight money policy including raise reserve requirement, raise discount rate and sell treasure bill in the market. ... By selling treasure bill in the market, the Federal Reserve decreases the amount of money supply in the circulation. ... Also the Federal Reserve could take an easy money policy to stimulate the economy and increase the demand. ... Second, the Fed could lower the discount rate, which...

• Word Count: 1364
• Approx Pages: 5
• Grade Level: Undergraduate

Introduction The media pays close attention to interest rates, noting when the Federal Reserve Board's Open Market Committee meets, and the stock and bond markets react to real or anticipated changes in interest rates. ... This research explores how the Federal Reserve conducts monetary policy, and examines the monetary policy of the last several years. ... The Federal Reserve does not set interest rates directly for mortgages or Treasury bills, or any other financial instruments marketed to consumers. Instead, the Federal Reserve adjusts the discount rate, which is the interest rate ...

• Word Count: 1072
• Approx Pages: 4
• Has Bibliography
• Grade Level: Undergraduate

The Federal Reserve Act of 1913 established the Federal Reserve System as the central banking authority of the United States. ... They must maintain minimum levels of reserves with one of the 12 Federal Reserve banks and must deposit a percentage of their customers' savings account and checking account deposits in a Federal Reserve bank. ... Under the Federal Reserve Act of 1913 and amendments over the years, the Federal Reserve System: Conducts America's monetary policy. ... The Federal Reserve makes loans to commercial banks and is authorized to issue the Federal Reserve note...

• Word Count: 1432
• Approx Pages: 6
• Has Bibliography
• Grade Level: High School

An argument can be made both ways, but based on decisions made by the Federal Reserve Board, current interest rates, employment standings, and GDP; it is probably safe to say that though the economy is weak, it is recovering. Our Federal Reserve's main duty is to monitor our fiscal and monetary policies. When the Federal Reserve lowers the interest rate in a recession or a weak economy in an effort to try and stimulate economic growth. Thus, on November 6, 2002, Alan Greenspan has, as the Chairman of the Federal Reserve Board, lowered interest rates an additional 0.5%, bringing it t...

• Word Count: 813
• Approx Pages: 3
• Has Bibliography

These potential causes include the maldistribution of purchasing power, the lack of diversification in the American economy, the credit structure of the economy, bank failures, the action of the Federal Reserve, America's position in international trade, and the international debt structure. ... John Maynard Keynes, in the early 1930s, attributed the crisis to the impact of changes in Federal Reserve monetary policy. ... Nobel Laureat and University of Chicago emeritus economist Milton Friedman and his collaborator, Anna Schwartz, in A Monetary History of the United States, 1867 - 1960 ...

• Word Count: 1109
• Approx Pages: 4
• Grade Level: Undergraduate

So far the, the Federal Reserve has slashed the interest rate three times this year. ... It's because Federal Reserve Chairman, Alan Greenspan believes in a theory known as the "Philips's Curve." Last week, Federal Reserve Board Chairman Alan Greenspan indicated he was leaning toward a "pre-emptive action" against inflation because a tightening labor market must, "absent the unlikely repeal of the law of supply and demand," inevitably drive up wages," wrote Kim Clark, Business & Technology 6/28/99. ... Which is why the Federal Reserve has been slashing the interest rate. ... Howeve...

• Word Count: 502
• Approx Pages: 2
• Has Bibliography

The best evidence suggests that Federal Reserve behavior and the public statements of numerous government officials caused the crash. In the fall of 1928 immediately following the death of Benjamin Strong, the President of the Federal Reserve Bank of New York, the Federal Reserve policy became substantially tighter. Adolph Miller of the Federal Reserve Board was able to take control of policy. ... After reading a passage from the Federal Reserve Bulletin it shows that the Federal Reserve Board thought that the increase in debt somehow used real resources, and reduced the level of real inves...

• Word Count: 1299
• Approx Pages: 5
• Has Bibliography
• Grade Level: Undergraduate

Though a "solid recovery in the US economy" is evident, Federal Reserve officials are saying that any rise in interest rates in the United States are more than likely to be off in some way. Members of the Federal Reserve as well as the President of the Philadelphia Federal Reserve have made various comments, stating that "any policy adjustment need not take place in the near future", and saying that the current low rate environment would extend well beyond the spring. ... The article points that the comments that are being made by Federal Officials all suggest that the strategy of the central ...

• Word Count: 516
• Approx Pages: 2
• Grade Level: Graduate

While the economic outlook may be bleak for some, the Federal Reserve sees a brighter picture toward our economy's long-term growth. ... The Federal Reserve has and always will be concerned with such things as inflation and the possibilities of recession, but realizing the great impact that consumer confidence has recently had on our economy, the FOMC has currently focused in on this situation's various causes and effects as one of it's main concerns. ... The possible restructuring of the Federal Reserve's discount window facility deals with the proposal of two new discount...

• Word Count: 590
• Approx Pages: 2
• Has Bibliography
• Grade Level: Undergraduate

From 1928 - 1929, the Federal Reserve had raised interest rates in hopes of slowing the rapid rise in stock prices. ... The Federal Reserve did little to try to stop the banking panics. ... In addition to allowing the panics to reduce the U.S. money supply, the Federal Reserve also deliberately contracted the money supply and raised interest rates in September 1931. According to the monetarists Milton Friedman, Anna Schwartz and current chairman of Federal Reserve System Ben Bernanke at the time of Great Depression American central bank's policy making was really poor and it unwind loop o...

• Word Count: 1664
• Approx Pages: 7
• Has Bibliography
• Grade Level: Undergraduate

The Federal Reserve Bank, established in 1913, has the duty of regulating money and credit. It issues Federal Reserve Notes, clears checks, acts as a fiscal agent to the federal government, and audits and maintains competition in the banking system. ... During this period the Federal Reserve spent $100 billion every month buying mortgage-backed securities, by the end of the program the Federal Reserve had spent $1.7 trillion dollars on these securities. ... In this round, the Federal Reserve decided to spend $85 billion on U.S. ... Federal Reserve. ...

• Word Count: 3183
• Approx Pages: 13
• Has Bibliography
• Grade Level: Undergraduate

Such aspects of our economy that control our GDP are the law of demand, stock exchange activity, and the Federal Reserve System. ... This is where the Federal Reserve System comes in. The Federal Reserve is a national banking network They do a number of things in order to try and control the money supply. ... The Federal Reserve System is in control of the nation's money supply, and it is headed by Alan Greenspan. ...

• Word Count: 517
• Approx Pages: 2
• Grade Level: High School

The Federal Reserve Board, a special government agency, had been set up in 1913 to prevent depressions and the problems that were associated with it. ... The actions of the Federal Reserve Board explained many problems that led up the Stock Market crash and the other effects of the depression. The Federal Reserve Board watched banks very carefully and thought what was best for the banks, would also be good for America. ... Low market interest rates and low reserve requirements were set by the Board that satisfied the banks. ...

• Word Count: 773
• Approx Pages: 3
• Grade Level: High School

The current exchange rate is 2.8770 real/ 1US$, (Federal Reserve Statistical Release). ... The current exchange rate is 111.42 yen/ 1 U.S.$ (Federal Reserve Statistical Release). ... In February, Japan's foreign-exchange reserves rose to a record high as the Ministry of Finance urged to sell yen to keep the currency from strengthening too much against the dollar. The nation's reserves rose 4.8% in February, the sixth straight increase (Wall Street Journal). ... The current exchange rate for the British pound is 1.8428/ 1US$ (Federal Reserve Statistical Release). ...

• Word Count: 2005
• Approx Pages: 8
• Has Bibliography

Consumer Price Index Consumer Price Index Our economy today uses economic indicators to figure out how the economy is doing and one of these indicators is the Consumer Price Index (CPI). The CPI is an inflation indicator that is calculated by the Bureau of Labor Statistics that they publish ever...

• Word Count: 322
• Approx Pages: 1
• Grade Level: High School

The role of the banking system can be described by explaining the following terms, for example, the Federal Reserve which is the bank of the banks, it hold all the money for the banks and it makes loans to banks too. ... In a monetary policy they can change the reserve requirement. ...

• Word Count: 1180
• Approx Pages: 5
• Grade Level: High School

Oscar Wilde, an Irish writer, once said "to do nothing at all is the most difficult thing in the world, the most difficult and the most intellectual." While the most intellectual people are believed to be in charge of our world's financial systems, those who have supported big-money stimulus's flood...

• Word Count: 663
• Approx Pages: 3
• Grade Level: Undergraduate

The European debt crisis is a recent financial event that has affected many different countries around the world. Europe has implemented the Euro as a common currency among 17 countries. There are also 10 countries in Europe that are a part of the Eurozone but do not use the Euro as their currency. ...

• Word Count: 1475
• Approx Pages: 6
• Has Bibliography
• Grade Level: High School