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Analyzing the Federal Reserve and Monetary Policy

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What are the functions of the 12 Federal Reserve banks, including their monetary policy actions?

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What are the functions of the 12 Federal Reserve banks, including their monetary policy actions?

The functions of the Federal Reserve banks that make up the Federal Reserve System are:

1) To formulate and implement monetary policy. The goal is to make sure that there is enough money and credit available with as little inflation as possible.

The major monetary policy actions of the Federal Reserve are:

a) Open market operations. Acting on the advice of the Federal Open Market Committee (FOMC), the Federal Reserve banks will purchase and sell US government securities - when securities are bought, the reserves of money that ...

Solution Summary

This is a description of the functions of the US Federal Reserve System and its effect on monetary policy.

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The key objectives and what are the conventional monetary policy tools

3A) What are the key objectives and what are the conventional monetary policy tools does the Fed use to achieve those objectives?

Then you read the speech given by the Fed's Chairman Bernanke on Oct 11, 2011 at the Federal reserve Bank of Boston at this url link http://www.federalreserve.gov/newsevents/speech/bernanke20111018a.htm of the Fed's website to answer the following question 3B.

3B) Read the speech of the Fed Chairman Ben Bernanke he delivered on Oct 18, 2011 at the Federal reserve bank of Boston, which is available at this url link http://www.federalreserve.gov/newsevents/speech/bernanke20111018a.htm

After reading the contents of his speech topic, "The Effects of the Great Recession on the Central Banks' Doctrine and Practice", critically and briefly analyze the direction of changes in monetary policy practice of the Federal Reserve from its conventional monetary policy framework in the wake of the great recession the US economy currently faces.

Alternatively (for 3.b),
3.b. Read the following two news analysis on the effect of monetary policy actions on November 30, 2011 by China on the global market, including US stock market. Based on your knowledge on monetary actions and its impact on the economy, briefly analyze the connection between the reduction of reserve requirement by China's central bank and its economy plus the economy of the rest of the world, including the US economy.

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