Free Essays on Federal Reserve to Get Inspired & Learn by Example

Abstract

This paper is aimed at answering five major questions as provided by the instructor. The questions are related to the Federal Reserve and its role in affecting the economy of the country. The first question is related to evaluating the role as well as the effectiveness of the Federal Reserve in stabilizing the current economy. The second question pertains to determining the economic indicators the Federal Reserve should analyze in order to better stabilize this particular economy. The third question is about describing which monetary policies the Federal Reserve might use to influence the money supply. In the answer Continue reading...

Central banking system is a major part of any economy. Central banking systems in the economy have important roles that they play in driving a country’s economy. They regulate money supply; they are responsible for controlling the interest rates as well as looking after the banking system within the country. Today, central banks are acting as agencies of monetary policy. Central banks play important roles in creating financial stability functions in a country. In United States, the central banking system is called Federal Reserve Bank (Fed). The importance of central banking in U.S. is emphasized in the roles Continue reading...

Introduction

The financial system of the country is the whole sphere of economic relations of all business entities and government bodies involved in economic life, as well as regulating economic relations within national boundaries. Since the market economy, as well as in transition, virtually all economic relations exist in the form of commodity-money, so far almost all of them appear to exist in the form of cash flows. Enormous diversity of species of these streams forms the country's financial system. In the financial system allocates public finances, finance companies and finance people.
Subsystems called major components of complex systems, which Continue reading...

1.0 The money market and its transactions
The money market is the center of credit exchange in the United States and around the world. It is where businesses (local and global), governments (local and global), and individuals (local and global) borrow or lend short-term credit instruments usually for a term of 1 to 120 days (Kidwell & Peterson, 1987). Instruments include the U.S. Treasury securities (e.g. Treasury bills), negotiable certificates of deposit (time deposit), commercial paper (short-term unsecured promissory notes), banker’s acceptances (time drafts), and repurchase agreements (sale of short-term security or collateral). However, the U.S. Treasury bills are Continue reading...

Introduction

In its early days the main purpose of the Federal Reserve System was to help banks during banking crises and exchange fevers. Initially, the control over the level of bank credit, money supply and rates of interest was not within the purview of the Federal Reserve System. In that time the gold standard was dominated in the United States, and it was assumed that the amount of gold stored in the bowels of the US banking system is the mechanism that regulates the amount of money in circulation and bank credit. The founding fathers of the Federal Reserve System Continue reading...

Financial markets play a critical role in stable and efficient operation of economies of various countries by providing liquidity to various forms of securities. Owing to their nature of providing simple and instant marketability, these markets allow both sellers and potential buyers of a variety of securities to interact openly and freely. Through the existing regulations in financial markets, efficiencies in several aspects of its operations can be achieved. In addition, these markets help in the determination of the various risks and rewards of these securities thereby helping in effective and fair pricing of these securities (Burke & Litwin, 1992). Continue reading...

Introduction

Central bank is the backbone of a nation’s economy. As the name suggests, it is central to the banking system of a country. It prevents the banking system of a nation to collapse. It has major role to play in all phases of economy, including recessionary phase, stable phase and expansionary phase. As the markets are becoming more mature, the roles and responsibilities of the central banks are increasing.
The objective of this paper is to discuss the key roles of the central bank in an economy. The paper is divided into five sections. The first section provides Continue reading...

Financial markets play a critical role in the operation of economies of various countries owing to the nature of these markets to provide liquidity to various forms of securities. The markets allow both buyers and potential buyers of these securities to interact freely. Through the existing regulations in these markets, efficiency in operations is achieved In addition, these markets helps in the determination of the various costs of these securities thereby helping in effectively pricing these securities (Burke & Litwin, 1992). In the United States, these markets have played key role in improving the operations of the economy owing to Continue reading...

American economy was at its peak in 2007 in its fourth quarter of the financial year until a mild recession that later developed into a severe one for the top world economists developed. The primary cause similar to the one that stagnated the United States economy in the seventy's was the contradictory monetary policy from the Federal Reserve that insisted and reigned in high inflation. This recession was a major one that affected various, and most of the countries in the business as the markets were totally bear in stock (Floyd, 2012).
The recession in 2008 stagnated major players Continue reading...

Introduction

Expansionary policy is one of various stabilization policies that can be implemented by government to address economy problems. The Federal Reserve System (Fed) can also stimulate the economy by mechanisms of the expansionary monetary policy. In this paper the main tools of expansionary fiscal and monetary policies are described as well as analyzed main differences between classical and Keynesian theories regarding the aggregate supply and demand connection.

Main Body

For many years the question on the government’s impact on the general costs level, unemployment and inflation rate is being discussed. Economists that are also called “activists” promote the necessity of Continue reading...