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What does the Federal Reserve Board do to combat inflation when the economy is bad?

What does the Federal Reserve Board do to combat inflation when the economy is bad?

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What is the Federal Reserve?

The Federal Reserve is a system of 12 government controlled district banks and 25 regional branches located across the United States. Federal Reserve Board regulates money supply, prints money, fixes the discount rate and issues government bonds. The Federal Reserve System is the central bank of the USA, run by the Fed under a chairman and seven committee members (or 'governors') who are all appointed by the US President. Although the board is appointed by the President, the whole system is relatively independent of the US government. The Federal Reserve was established in 1913 to maintain a sound and stable banking system throughout the United States and to promote a strong economy. The Board of Governors is made up of 7 members that are appointed to 14-year terms by the President and approved by the Senate. Almost all U.S. banks are a part of the Federal Reserve System, which requires that those banks maintain a certain percentage of their assets deposited with the regional Federal Reserve Bank.

What does the Federal Reserve Board do to combat inflation when the economy is bad?

The Federal Reserve System ...

Solution Summary

In a 736 word solution, the response first explains exactly what the Federal Reserve is, and then discusses the action they can take. There are five links provided for further information.

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