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Research the current monetary policies in use by the Federal Reserve. Board of Governors of the Federal Reserve System is a good resource to start your research. http://www.federalreserve.gov/monetarypolicy/default.htm

Write a 1-page paper in which you explain whether the Federal Reserve is currently pursuing an expansionary or restrictive monetary policy.

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Joshua Stredder
Joshua StredderLv10
28 Sep 2019

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Unit 6. Monetary Policy: What works? Monetary policy by the US Federal Reserve is important for the US economy. However, economists disagree about several aspects of Federal Reserve decisionmaking powers including the composition of the Federal Reserve committees, Federal Reserve goals, and the actual impact of Federal Reserve policy on the economy. Address the following questions for this week’s assignment: ? Provide a brief (one paragraph) overview of this week’s material. ? Should the Federal Reserve Board focus exclusively on the problem of inflation? ? What other goals are appropriate for Federal Reserve policy? ? What is the appropriate goal for the inflation rate? ? How should the Federal Reserve Board use its policy to achieve its goals? ? How effective is the Federal Reserve monetary policy in achieving its goals? ? Is the composition of the decision-making bodies of the Federal Reserve appropriate for a democracy? For information from the Federal Reserve Board itself, go to the Board of Governors of the Federal Reserve System at: http://www.federalreserve.gov/ The Board of Governors site contains the Fed's Beige Book, Congressional testimony and speeches of Federal Reserve Board members, Federal Open Market Committee (FOMC) information, press releases, current interest rate information, and general information about the Federal Reserve System. A PDF-format version of The Federal Reserve System: Purposes and Functions, a thorough overview of the Federal Reserve System, is available by chapter or as a single document. In addition, the site contains a summary of Federal Reserve regulations. Particularly useful is the publication, “Purposes and Functions of the Federal Reserve System” at: http://www.federalreserve.gov/pf/pf.htm And, “Monetary Policy: An Introduction” http://www.frbsf.org/publications/federalreserve/monetary/index .html Criticism of the Federal Reserve Board comes from both conservatives and liberals sides. For a liberal viewpoint see the Financial Markets Center at: http://www.communityinvestmentnetwork.org/nc/single-news-itemstates/article/financial- markets-center/?tx_ttnews%5BbackPid%5D=326 For a conservative viewpoint, see the Shadow Open Market Committee at: http://shadowfed.org/ Your final product will be a paper that: ? Addresses each of the questions above in total. ? Is APA fortatted. ? The body is to be 2 pages minimum. The requirements for your assignment are: 1. Answer each question fully 2. Define the overall subject of each question. 3. Cite at least four (4) resources from this week’s materials

The Federal Reserve System is responsible for establishing monetary policy. It has a significant degree of independence from the executive, legislative and judicial branches of government. Its policymakers, the seven-member Board of Governors, serve 14-year terms with one member appointed every two years. There are 12 Federal Reserve District Banks spread around the county rather than one central bank in Washington, D.C. to carry out the policies established by the Board of Governors.

Why do you think the Fed was set up in this manner? Do you think that it is a good system for establishing and carrying out monetary policy in the country? Some politicians have suggested that the executive and/or the legislative branches of government should have more say or influence regarding monetary policy. In your opinion, would this be a good idea or not?

The monetary system in any economy facilitates trade and allows people to trade more efficiently, as compared to a barter economy. In the United States, the monetary authority is the Federal Reserve System (also referred to as the Federal Reserve, or informally, as the "Fed" )

For this assignment, use the information presented in the textbook and the Fed website (http://www.federalreserve.gov/) when addressing the questions below.

1- What are the tools available to the FED for controlling the money supply? Which are used most often? Which are the most effective?

2- How does the money multiplier help to determine the effects of monetary policy?

3- What are the pros and cons of using monetary policy, as opposed to the use of fiscal policy, for implementing economic policies and practices?

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