Essay The Federal Reserve System

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Pages: 12

The Federal Reserve System
Why do a research paper on the Federal Reserve System? This is a question we went over in our heads while making a decision on the type of research paper to do, what we wanted to learn more about and why. Over the past few years we have realized the impact that the Federal Government has on our economy, yet we never knew enough about the subject to understand why. While taking this Economics course it has brought so many things to our attention, especially since we see inflation, gas prices, unemployment and interest rates on the rise. It has given us a better understanding of the effect of the Government on the economy, the stock market, the interest rates, etc. Since the Federal Government has such a control
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After much debate, Congress passed the Reserve Act, which was signed into law by President Woodrow Wilson, on December 23, 1913. The Act stated that its purpose was to provide for the establishment of Federal Reserve banks, to furnish an elastic currency, to afford means of discounting commercial paper, and to establish a more effective supervision of banking in the United States, among other things. Soon after the creation of the Federal Reserve, it became clear that the act had broader implications for national economic and financial policy. As time passed, further legislation clarified and supplemented the original purposes. Key laws affecting the Federal Reserve have been the Banking Act of 1935, the Employment Act of 1946, the 1970 amendments to the Bank Holding Company Act, the International Banking Act of 1978, the Full Employment and Balanced Growth Act of 1978, the Depository Institutions Deregulation and Monetary Control Act of 1980, the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and the Federal Deposit Insurance Corporation Act of 1991.
Congress defines the primary objectives of national economic policy in two of these acts: the Employment Act of 1946 and the Full Employment and Balanced Growth Act of 1946. These objectives include economic growth in line with the economy's potential to expand; a high level of employment; stable prices and moderate long-term interest rates.