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When looking at the role of the Fed, how is the Fed instrumental in establishing economic growth? Why does the Fed provide stability in our economy

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Retselisitsoe Pokothoane
Retselisitsoe PokothoaneLv10
28 Sep 2019

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Related questions

uring the 2012 presidential election campaign, Texas Governor Rick Perry criticized the actions of the Fed Chair Ben Bernanke. He Argued that, "Printing more money to play politics at the particular time in American history is almost treasonous in my opinion." An article in the Wall Street Journal commented that despite Perry's remarks, "Bernanke is willing to embrace the political independence embedded in his role to to what Fed officials think the economy needs." How is political independence embedded in the role of Fed chair? Why did Congress decide to make the Fed independent of the rest of the Federal government?

2/. Assume that you are the manager of a firm. You are concerned about a potential increase in interest rates because it would reduce the demand for your products. Currently, economic growth is high, but annual inflation has increased from 3 percent to 5 percent within the last six months. The unemployment rate is very low and cannot go higher. The Federal Reserve (Fed) is meeting next week to assess economic conditions and set monetary policy.

A. Given the current economic situation, should the Fed adjust or not adjust economic policy? If so, how? If not, why?

B. Recently, the Fed has allowed the money supply to expand beyond its long-term target range. Does this affect your expectation of what the Fed will decide at its upcoming meeting?

C. Suppose the Fed has just learned that the Treasury will need to borrow a larger amount of funds than originally expected. Explain how this information may affect the degree to which the Fed changes the monetary policy.

Who is the current Chairman of the Federal Reserve? What is he doing to boost the financial market and the economy? Can he help revive the housing market? Did the REFI (Mortgage Refinancing) Boom help the economic recovery? Let's find out what the Federal Reserve (Fed) is all about. What is FOMC doing? What is the current Federal Funds Rate? How does the Fed implement monetary policy to manage the economy? Is the Fed currently using Expansionary Monetary Policy? Why?

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