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Thr federal Reserve

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Please provide original work to meet the attached requirement concerning the federal reserve.

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Thr federal Reserve is discussed very comprehensively in this explanation

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o Define the purpose and function of money.
The purpose of the money is to act as a medium of exchange in transactions. That is money facilitates purchase and sale of goods and reduces the need for barter. On the other hand money has several important functions like it is a unit of account, and a store of value. For instance, accounting uses money as a unit for recording, calculating and reporting. Money is also a standard of deferred payment. A money supply typically consists of currency and demand deposits in banks. These deposits are far larger than the physical supply of notes. The money supply of notes and coins plus checking accounts is designated M1, M1 plus savings accounts is called M2, M2 plus term deposits is called M3.
o Explain how the central bank manages a nation's monetary system.
The central bank has the exclusive privilege to lend a government its currency. It charges interest to the government, and to other commercial banks for the money it lends to them. It manages the country's economic system by providing the country's money supply, controlling the loan interest rates, and acting as a lender of last resort to the banking industry The central bank manages the nation's monetary system by exercising supervisory powers over private banks. The central bank regulates the banking ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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