Homework Assignment – Week 1

dollar was close to an eight year shortage against the real, having lost more than 33% of its value during 2009 alone. During the past 12 month era, the exchange rate of the U.S. dollar (USD) has diverse from a low of BRL R $1.5310 to in height of BRL $1.7790. During 2010, the United States dollar typically kept an everyday exchange rate between (BRL) R$1.70 and (BRL) R$1.80, occasionally reducing below the (BRL) R$1.70 level.

The Federal Reserve System was signed by President Woodrow Wilson in 1913 and began operating in 1914; to this day it is still the central banking system for the United States. The responsibilities of The Federal Reserve are un-ending and complex. Due to the frequent re- occurring financial issues occurring between the years 1906-1907, like many things The Fed has had to change in numerous ways to adjust to the growing need of our expanding and evolving economy. The income for The Federal Reserve comes from interest on the U.S government securities that are acquired through open market operations (Federal Reserve education). Three major responsibilities of The Federal Reserve are stabilizing prices, interest rate adjustments, conducting investigations

Federal Reserve can be very confusing to understand and know what is their purpose and how they help the economy. The Federal Reserve was started in December 23,1913 by President Woodrow Wilson who sign the Federal Reserve Act. The Fed has many things that it controls in are economy. One of the Reason that President Woodrow Wilson put the Federal Reserve Act in to place because in 1913 there were a feel that banks were instable so many investors did not feel confident in the banks and felt that it was unsafe. One thing that made Woodrow Wilson make the Federal reserve is the people making a run on the banks frequently, which many bank at this time did not keep enough money in the bank and people panic heard about other banks falling so they would try and get all their money out of the banks as fast as possible. With so many people running on the bank would cause the bank to fell which became a big problem following the Great Depression. Then Woodrow Wilson need to find a way to make the bank safer and build a more secure financial system. One thing to understand is also the monetary policy which refers to Fed nation central bank, which influence the amount of money and credit in the U.S. economy and how we spend money and credit affects interest rates which help the U.S economy perform. However, the monetary policy main reason it to promote maximum employment, stable prices, and long term interest rates which help the feds control the economic growth.

The credit system of the country had ceased to operate, and thousands of firms went into bankruptcy (Born...,.12). Something had to be done that would provide for a flexible amount of currency as well as provide cohesion between banks across the United States. (Hepburn, 399) This knight in shining armor, as described in the story of the bank run, was the Federal Reserve. The Federal Reserve Act of 1913 helped to establish banks as a united force working for the people instead of independent agencies working against each other. By providing a flexible amount of currency, banks did not have to hoard their money in fear of a bank run. Because of this, there was no competitive edge to see who could keep the most currency on hand and a more expansionary economy was possible.

1. What are the factors that likely explain the difference between Microsoft’s market value of equity and its reported book value of equity?

The Federal Reserve plays a vital role as the intermediary in clearing and settling interbank payments to assure that the millions of transactions performed each day are processed safely and efficiently. Acting as the “Banker’s Bank”, the Federal Reserve Banks provide various services to the nation’s banks such as check processing, electronic transfers, and ensuring there is enough cash in circulation to meet public demand. As fiscal agent for the U.S. government, the Reserve Banks pay Treasury checks and issue, transfer, and redeem U.S. government

The Fed, established in 1913, has several main functions that include: establishing monetary policy, regulating smaller banking institutions, and finding ways to create financial stability. There are several reasons that these responsibilities need to remain out of the hands of politicians. The economic rule that economics and politics do not mix well because of their differing focuses, the differing goals of the two bodies, and the inconsistency of politicians in Congress

The Federal Reserve has many influence on economy and can be very helpful to banks when they are in trouble or need help to balance out. Fed also helps the government programs as well but is not direct link to the government. Many people need to know how the Federal Reserve work and how it effects on are life. It really didn’t know much about the Federal Reserve before doing this paper and now I know how important it is to understand how inflation can be controlled by the Federal Reserve. In this paper I want to help people understand how the Federal Reserve is structured, power they control, and it effect on the economy, how does the Federal Reserve effect today’s economy and how much power do they have over it. I really think know that I have explained how the Federal Reserve effect the consumer and how it was structured. It structured with the two parts that is broken down with different branch and banks. One of the part is different banks that are spread through the united states and the other branch control all the other through the board members that got put there by the President and the Senate so they have a major role in the economy” On balance, the Federal Reserve has moved closer to the “flexible inflation targeting” used, in some form or another, by many foreign central banks.”( Robert J Tetlow) The

In an instant a single organization, with minimal government oversight, can influence entire markets and monetary supply of the country with the largest economy in the world. The United States founding fathers established a government system to distribute certain powers of the federal government to particular branches that have checks and balances in place to assure efficiency and openness among its divisions. One may assume that the organization that controls the monetary supply of an economic powerhouse of a country would have strong oversight and control over the policies they carry out. The Federal Reserve, also referred to as The Fed, has a purpose to protect and control the fiscal system of the United States to create a safer lending and borrowing market for private citizens, businesses, and the federal government. Americans perceive the Fed as an extremely powerful organization. Some have asserted, including Hillary Clinton’s spokesman, Jesse Ferguson, that “The Federal Reserve is a vital institution for our economy and the well-being of our middle class” (qtd. in Shapiro 7). Unfortunately, Federal Reserve financial policies have become detrimental to the growth of the national economy and the dollar, therefore, congressional actions against the Federal Reserve Bank are a necessity to avoid continuation of instability in both US and world markets.

1. This question addresses the effect of Microsoft’s software capitalization policy on its financial statements. Ignore any potential tax effects.

The Federal Reserve System was founded by Congress in 1913 to be the central bank of the United States. The Federal Reserve System was founded to be a safer, more flexible, and more stable monetary financial system. Over the years, the role of the Federal Reserve Board and its influence on banking and the economy has increased. Today, the Federal Reserve System's duties fall into four general categories. Firstly, the FED conducts the nation's monetary policy. The FED controls the monetary policy by influencing credit conditions in the economy. The FED measures its success in accomplishing these goals by judging whether or not the economy is at full employment and whether or not prices are stable. Not only

United States Federal Reserve system, also known as Federal Reserve or simply “Fed” is the United States central banking system. The Federal Reserve took inception in 1913, after the adoption of the Federal Reserve Act. The United States Congress has mandated three macroeconomic objectives to the Federal Reserve. These are minimum levels of unemployment, prices stability and keeping in check the rates of interests. Over the years, the role of Federal Reserve has expanded. It now formulates the country’s monetary policies, conducts supervision and regulation of the banking institutions, maintenance of the financial

Over the past few years we have realized the impact that the Federal Government has on our economy, yet we never knew enough about the subject to understand why. While taking this Economics course it has brought so many things to our attention, especially since we see inflation, gas prices, unemployment and interest rates on the rise. It has given us a better understanding of the effect of the Government on the economy, the stock market, the interest rates, etc. Since the Federal Government has such a control over our Economy, we decided to tackle the subject of the Federal Reserve System and try to get a better understanding of the history, the structure, and the monetary policy of the power that it holds.

* Microsoft has retained $18.9 billion in earning over the years. It has over 2.5 times that amount in stockholder equity ($47.29 billion), no

SFAC No. 6 defines equity as the residual interest in the assets of an entity that remains after deducting its liabilities. If options and warrants do not meet the definition of liabilities, then they must meet the definition of equity. A liability is an obligation that embodies a future sacrifice of assets. The company owes no assets to option or warrant holders. There is no present obligation to surrender assets or perform services. If stock options and warrants do not meet the definition of