Monetary Policy and Federal Reserve Essay

Submitted By Qgalla1
Words: 385
Pages: 2

Quinn Galla
Honors Economics (2)
Mr. Burik
5 March 2013
Federal Reserve Reflection

Some ways the Federal Reserve (aka the fed) control monetary policy is in a few ways. One way is they have a huge impact on how money is produced and how it is spent. They do this to help promote economic goals worldwide and within the nation. In 1913 an act was passed giving the Fed power to enforce this monetary policy. They control the open market operations, reserve requirements, and they also have power of the discount rate. They ultimately influence the demand and supply of the Federal Reserve banks. The federal fund rate is controlled by the Fed and is a deposit that is funded by the Fed to other depositary institutions nationwide. A change in this federal fun rate is crucial in areas of interest rates, foreign exchange rates, amount of money/credit, and also things such as employment and output. There is a committee that is led by one of the most important people across the United Sates. He goes by the name of Ben Bernanke. This committee consists of 12 members along with reserved members on board. The member’s form 4 major banks serve 1 year terms and each year new states are rotated in it’s mainly bigger cities. At the meetings the committee holds reviews dealing with economic/financial conditions. Also, discussing risk of long term goals of price stability and growth within economy. When you write a check to your bank a process known as the money multiplier can come…