Title: Monetary Policy

Essay Details

Subject: Business
Author: Marlys H
Date: June 14, 2015
Level: University
Grade: A
Length: 7 / 1957
No of views: 0
Essay rating: good 0, average 0, bad 0 (total score: 0)

Essay text:

This policy differs from the monetary policy in a sense that is refers to efforts by the government to stimulate the economy directly through spending. The purpose of this paper will focus on how the federal reserve uses tools to control money, how those influences will effect the money supply and macroeconomic factors, how money is created and what combinations of monetary policy will help achieve a balance between economy growth, low inflation and a reasonable rate of unemployment...

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The "Fed" has three tools to manipulate the money supply. They are the reserve requirement, open market operations, and the discount rate. The first tool, the reserve requirement is the percentage of the deposits (at its vaults or with the Fed). The Fed mandates this ratio. If this ratio is decreased, banks are required to hold lesser amount as reserves and can lend that much more to their customers, thus increasing the money supply in the economy...

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