The Current Economic Literature

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.

1. Law enforcement agencies seek for lawbreakers to create problems in which they are fined for crimes they have committed. They want this to happen in order to create fines for these criminals in order for the agencies to make a certain amount of revenue from the fines that the lawbreakers pay as a consequence of their actions. Some laws that law enforcement agencies set up in order to create this type of revenue off of lawbreakers include speeding tickets. The action of speeding can cause more good than harm because of the amount of revenue that speeding tickets can produce, compared to the amount of speeding related automobile accidents that people who

The Federal Reserve should utilize a balanced approach to monetary policy. The current state of the economy—undershot employment and inflation goals—presents no conflict in achieving a neutral state. In fact any action that supports employment growth also moves inflation up toward our target (Evan

One of the responsibilities or purpose of the Fed, is to creating the nation’s monetary policy by persuading money and credit conditions in the economy to gain full employment and stable prices. Another job the Fed had was watching and instructing banks, and other important financial institutions. To make

The final accelerated trend reviewed is the pattern of price instability. Over the past thirty years companies grew to expect an overall steady price environment. This is no longer the case. The article suggests that “rather than trying to accurately forecast inflation or deflation – an impossible task – companies should focus on how they might manage price instability” (Beinhocker et al., 2009 p. 60). They recommend reviewing contracts with suppliers, wage agreements, policies on pricing,

The federal government responded to the crisis that affected businesses and Industries many ways. The Federal Reserve has been most successful in its double full-employment, low inflation mandate when it relies on fixed rules, and keenly looks on the intermediate term rather than trying to respond to short-term developments under political pressure. A number of policies were resolved to react on the emphasis of intermediate term stability on the handling of the

If the Federal Reserve saw or presumed that the monetary policies on economic stability were directly related to employment growth, then they were right to just serve one mandate of price stability. It was correct to argue that when the economic policies of a nation are favorable, the economic status of the country will grow. It is during economic growth when there are investments in the economy that attracts employments. When the economic growth is favorable, the lending of a nation will be better and thus self-employment will be evident. Therefore, the two mandates could be effectively joined into one another (Lalonde, & Parent, 2006).

In order for the Federal Reserve to fulfill their goal of moderate long term interest rates, stable prices and maximum employment, they rely on developing strategic changes to the monetary policy. Through monetary policy changes, the Federal Reserve can either restrict or encourage economic growth and inflation, thereby molding the macroeconomy into a state of consistent health. Overall, there are three tools used to modify the monetary policy, they include reserve requirements, discount rates, and open market operations. In an effort to promote price stability within the economy, these tools influence monetary conditions by affecting interest rates, credit availability, money supply and security prices. While one tool is use more frequently than the others, all three are necessary in establishing stable economic conditions.

It is important for the Federal Reserve to clearly explain these goals to the public so the people don’t get confused with the policy. This explanation is so that the people are well informed when making economic decisions in business and households. Also, this explanation provides economic and financial certainty. Finally, it is also explained to enhance transperacy and accountability in order to maintain

As economic growth increases moderately in 2014, the rate of inflation is expected to remain below 2 percent. The price of goods in the country will continue to be restricted by global competition and use of production capacities that are relatively low as compared to historical averages. In addition, the inflation rate will remain below 2 percent because of decrease in energy prices and small increase in the prices of food. Nonetheless, while energy prices continue to reduce this year, the percentage of the decrease will be less while food prices may regain normal rate of growth.

Congress has handed over the responsibility for monetary to the Federal Reserve, also known as the Fed, but retains oversight responsibilities in order to ensure that the Federal Reserve adheres to the statutory mandate of stable prices, moderate long-term rates of interest, as well as, maximum employment (Labonte, 2014). The responsibilities of the Fed as the country’s central bank are classified into four: monetary policy, supervision of particular types of banks and financial institutions for soundness and safety, provision of emergency liquidity through the function of the lender of last resort, and the provision of services of the payment system to financial institutions, as well as, the government (Labonte, 2014). The monetary role of the Federal Reserve necessitates aggregate demand management. The Federal Reserve defines monetary policy as the measures it undertakes in order to influence the cost and availability of credit and money to enhance the objectives mandated by Congress, which is maximum sustainable employment and a stable price level (Appelbaum, 2014). Since the expectations of businesses as capital goods purchasers and households as consumers exert an essential influence on the main section of spending in America, and the expectations are influenced in essential ways by the Federal Reserve’s actions, a wider definition would involve the policies, directives, forecasts of the economy, statements, and other actions by the Federal Reserve, particularly those

My paper was about the economic issue that I encountered during the process of buying a house in the United States. My family went through a dilemma of buying our own home in Columbus, Ohio on April 19th, 2003. I strive in developing detail; however, I struggle in grammar and punctuation.

The Federal Reserve has the authorization to ensure sufficient money as well as credit in the banking system that is needed to assist in a rapid growing economy (McEachern, 2015, p. 213). However, the Federal Reserve has the authority to sell and buy all government securities to clear any checks that are in the banking system, to expand loans to member banks, and to require that all member banks embrace reserve that are equivalent to at least some specified fraction of their deposits (McEachern, 2015, p. 213). Nevertheless, the two mandates of the Federal Reserve System are maximum employment and price stability (McEachern, 2015, p. 215).Maximum employment is ensuring that jobs are easier to find; therefore, allowing people to have money

From an economic perspective Blau and Abramowitz (2010) “The growth and increasing dominance of the market economy consititutue one of the most remarkable changes …. The changes that it brought about the changes that triggered the need for new forms of social welfare” (p.88). Based on the nation’s debt rising and the amount of people who were living in poverty there was a need for change. Government decided that making changes to AFDC would be the place to start. PRWOA was established to address the issues of poverty and end Welfare dependency through the TANF program. The nation’s economy causes for a significant change in how funds are being dispersed and whether or not there are programs available to help the people who are in need.

The dual mandate to the Federal Reserve pivots around the first two goals, which are maximum employment and stable prices. To attain its objectives, the Fed has relied