How Money Changes Hands : A Small Window Into The Federal Reserve

835 WordsApr 16, 20164 Pages
Professor Cadena Principles of Macroeconomics 15 April 2016 How Money Changes Hands - A Small Window into the Federal Reserve Many people give no thought as to the daily operations of the Federal Reserve. It has a shocking amount of impact on the daily lives of every American. Without its influence, I believe it is safe to say our lives as we know them would come to a screeching halt. Everything from the value of our currency (therefore the prices we pay) and ensuring banks are not ripping off its customers, to completing digital transactions within tenths of seconds is regulated for the stability of the people, the nation, and the world. The responsibility for oversight of trillions of dollars on a daily basis falls to them. The Federal Reserve Payments Study is released on a triennial basis since 2001 (Reserve, Gerdes and Liu). They are tracking trillions of dollars in transactions. The Federal Reserve sends out surveys to companies that act as both traditional and “alternative payment initiation methods” (Reserve, Gerdes and Liu) in order to understand how people spend their money. This should not be confused with what they spend it on but rather the method of how it changes hands. The majority of commerce is conducted digitally. The newer methods of noncash payments are accelerating in use. We are leveraging the power of technology to make our purchases faster and safer than carrying around pockets full of gold. I – for one – rarely even carry any form of

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