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Federal Reserve Bank

In: Business and Management

Submitted By Lovey37
Words 516
Pages 3
Federal Reserve Bank
Lovey Brown
ECO/372
August 9, 2012

The United States, was economically influenced by both domestic and global events in 2011. The Japanese earthquake left a major fiscal effect on the world. Monetary situations of importance is the reason states have central banks. These banks act as the state's money directors.
Purpose and Function of Money Money has a main purpose and function in the economic world. It functions as a regulation of well-known dealings for government systems. Monetary units can be calculated by the quality of the other forms of currency such as commodities. The economic value of each unit of measurement is normally discovered by the government of which it is settled. In the United States, the Federal Reserve controls the domestic monetary system policy. There are primarily two ways a central bank controls its state's monetary system policy. The Federal Reserve can allocate interest rates to banks acquiring money from the Central Bank. The Federal Reserve can also regulate and set the Federal Reserve obligation for banking organizations.
Managing a Nation's Monetary System Without an organization that controls states’ money, there would not only be a diverse nation, and possibly open to improper growth. Our nation faced prevailing economic depressions in the 1800s because of the want of a domestic monetary control system. In 1913, Congress decided that it was necessary to proportion the fiscal needs of the United States and consequently the Federal Reserve Act was passed. The FED acts as a money director because it is unachievable for money to be self-controlled. The Federal Reserve expresses several monetary system policies in an attempt to keep up production, jobs, steady prices. “The stimulus program will affect the money supply by increasing an amount equal to the change in...

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