Explore BrainMass

Explore BrainMass

    Fed monetary policies

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Do you think the current Fed monetary policies are effective?

    © BrainMass Inc. brainmass.com November 24, 2021, 11:57 am ad1c9bdddf

    Solution Preview

    Yes Fed Policy have been effective.

    After experiencing one of the best and longest expansions ever in US economic history, the economy slowed in the third quarter of 2000. Monetary policy is the first and most effective way to avoid or to combat recession and the Fed has acted quickly to lower rates.

    The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
    The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.

    Changes ...

    Solution Summary

    The Federal Reserve is judged.