Household Expenditure and Savings

As a result of the declining U.S. house prices in 2006 and 2007, refinancing became more difficult and as adjustable-rate mortgages began to

The Federal Reserve System is composed of twelve board members. The Board of Governors consists of seven of these members and the other five members are Reserve Bank presidents. This committee is responsible for many things including: monitoring oversees open market operations; this is the top resource to assist in the expansion of credits and financial

The FOMC, Federal Open Market Committee, is a group made up of the 7 Board of Governors, the President of the New York Reserve Bank, and 4 other Reserve bank presidents who switch with other Reserve Bank’s on one year terms. Together these members meet and vote on the policies in which they believe they should enact given the current and predicted future state of the economy.

The Federal Open Market Committee (FOMC) is the monetary policymaking body of the Federal Reserve System. The Federal Open Market Committee is composed of 12 members: five of the 12 Reserve Bank presidents and seven members of the Board of Governors. The Chairman of the FOMC serves as the Chairman of the Board of Governors. The president of the Federal Reserve Bank of New York is a permanent member of the Committee. The

As you may or may not know “The Federal Reserve System is made up of a Board of Governors and twelve regional Federal Reserve Banks located in major cities throughout the country. While the board has seven members the two serve as chairman and vice chairman and each governor is appointed to fourteen-year term while appointments to the roles of chairman and vice chairman are for four years. The Federal Reserve governors serve second to lifetime appointments of federal judges” (Board, 2003). The Federal Open Market Committee (FOMC) sets target that meets eight times per year to make decisions on monetary

In the 1930s the Federal Reserve act was amended to create the Federal Open Market Committee (FOMC), consisting of the seven members of the Board of Governors and five representatives from the Federal Reserve Banks. The FOMC meets at minimum four times a year and has the power to direct all open market operations of the Federal Reserve banks.

The Federal Reserve house the Board of Governors, The Federal Reserve Banks, The Federal Open Market Committee (FOMC), and Advisory Committees. The Federal Reserve Bank is directed by the Board of Governors or Federal Reserve Board, which is located in Washington D.C. The Board of governors is the national aspect of the Federal Reserve System and consists of nine board of directors which are appointed by the President serve a fourteen year term. The Chairman and Vice Chairman are appointed to four year terms which can be renewed (Federal Reserve, 2009). The Federal Reserve Banks are a network of 12 banks with 25 branches. Each banks serves a region of the country and the 12 locations are “Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco” (Federal Reserve System, 2001). These Federal Reserve Banks serve other banks, the U.S. Treasury and inadvertently, the public. The FOMC is made up of twelve members, seven from the Board of governors and five Federal Reserve Bank presidents (Federal Reserve System, 2001). The Advisory committee advises on the Federal Reserve System and provides information on the effect of system policies. The advisory committee includes the Federal Advisory Council, the Consumer Advisory Council, and the Thrift Institutions Advisory Council, which work together to advise individual Federal Reserve Banks on these interests (Federal Reserve System,

On the other hand, the reasons for increases of consumer expenditure and investment levels as mentioned above are only all valid if ceteris paribus is assumed. In reality, both factors of aggregate demand can be affected by multiple other external factors for example, consumer expenditure can be affected by the marginal prosperity to consume amongst consumers and therefore if this is very low then a cut in interest will see a minimal change in consumption and investment levels. In terms of consumers and firms if a large cut were to occur it would have a far superior effect in comparison to a small cut which could potentially have no impact. As well as this it can also be affected by the Income Elasticity ofDemand this means the responsiveness of the demand for a good to a change in

The Federal Reserve is the Central bank of America and act as the lender of last resort. The central bank was founded in 1913 by the then elected members of congress. The Federal Reserve board is comprised of 12 members. The head of the Federal Reserve is the board of governors. Janet L. Yellen is the current Chair of the Board of Governors of the Federal Reserve. Janet Yellen also serves as Chairman of the Federal Open Market Committee which makes up part of the central bank, the System's primary monetary policymaking body.

A Board of Governors supervises the Federal Reserve System. The Seven members of the Board of Governors are appointed by the president with the approval of Congress. The Federal Open Market Committee acts on one important part of monetary policy: the buying and selling of U.S. government securities by the

Obviously all of these factors can have some kind of effect on the economy. With cut backs comes a slowdown in output and production from businesses and can cause inflation to occur where people make the same or less amount of money but the price of goods goes up. Essentially, interest rates control the whole economy: if interest rates go up then the economy slows down and vice versa. However if interest rates go too low or stay low for a long period of time it can lead to inflation which also hurts the economy. In essence, higher interest rates are not necessarily a bad thing. Higher interest rates can curb inflation, meaning your pay will go further. A good example of this is the price of gasoline. When the price of gas goes up people drive less and spend less because more and more of their income goes toward fuel. When the price of gas goes down people have more money to spend. The increase in spending will be seen somewhere in the economy whether it is at the grocery store or online internet sales.

The Federal Reserve is in charge of the Monetary policy in the United States. The Monetary policy is managed by modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in their vaults. This is all controlled by the Federal Reserve. In simple terms the Monetary policy happens when the Federal Reserve places actions that influence the amount of money and credit in this economy. So for example if the cost of credit is reduced, more businesses will borrow more money and that will heat up the economy. The overall goals of the Monetary policy are to have economic growth, have everyone be able to be employed and initiate reasonable prices.

c. The money comes from individual savers, pooled by savings agencies to provide mortgage loans.

Draw a second I-S a bit to the right of the original to show that effect. The lending-liquidity/money curve shifts to the right if the central bank lowers its interest rate by a large amount. Draw a second L-M line a bit further from the original. (This fiscal policy is approximately what Australia has been having since 2009 to now 2012 but with complications in the housing industry). The new equilibrium will be at a lower intersection that represents the increase in GDP but with a lower interest rate than before.

Monetary policy is the mechanism of a country’s monetary authority (usually the central bank) taking up measures to regulate the supply of money and the rates of interest. It involves controlling money in the economy to promote economic