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    Monetary Policy & Financial Institutions

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    1. What do you think the Federal Reserve will do concerning interest rates over the next two years? Explain your reasoning

    2. What changes in your financial planning will you be making based on your predictions concerning interest rates? Will this change your plans concerning buying a home, refinancing a home, saving more money in a bank, or investing in the stock market? Explain your reasoning.

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    Monetary Policy: Interest Rates and Refinancing

    What the Federal Reserve may do concerning interest rates over the next two years

    Monetary policy is one of the tools of a country's Central Bank (e.g the Federal Reserve in the case of the U.S.) to solve economic problems or to further improve the economy. Various tools utilized include interest rates, open market operations, and other tools that would influence money supply available in circulation. Although there are various alternative monetary tools, the tools that must be utilized should be appropriate to a country's economic condition. As such, the government, through its central bank authorities, studies the economic situation and decide on an appropriate monetary tool to address economic concerns.

    What the Federal Reserve would do to interest rate may be determined only after getting some background on the forecasts of the U.S. economic situation during the period required - the next two ...

    Solution Summary

    The expert examines monetary policy and financial institutions. Federal reserves concerning interest rates over the new two years are determined.