This website uses cookies to ensure you have the best experience. Learn more

Federal Reserve Essay

943 words - 4 pages

Federal Reserve
The Gross Domestic Product (GDP) is a calculation that provides insight into the current economy of our nation to allow individuals to understand the current and past year’s standings in the economy. The calculation of the GDP allows for the government to determine what adjustments are necessary to manage an effective status for the economy. Based upon the GDP the government can forecast any necessary changes that must be made to either the monetary policy or the fiscal policy. The wealth of a country is based upon the government’s ability to manage the economy through the monetary system and not on the amount of money that is located within that economy. The calculations for the GDP are produced to provide the most accurate totals that can result in a smooth transition for the financial market which allows the government the necessary time needed to react to a recession.
Purpose and Function of Money
The purpose of money is to act in an economy as an asset which allows consumers to trade for a product or services. Money includes four functions: to work as a medium of exchange, a unit of account, a store of value, and a standard of deferred payment (Hubbard & O’Brien, 2010). When used in international transactions money also results in a trade that is easy. Money allows for individuals to feel secure among their transactions and ensures them that a form of payment is guaranteed to them. Most importantly money aids individuals in acquiring the resources that are necessary to live their life.
Central Bank
The Monetary Policy is conducted by the Feds which include seven people from the Board of Governors and an additional five members whom are Presidents from regional banks. The Feds determine the money supply movement based on the current standings of the economy. To stabilize the economy bonds are used which release money into the market. The responsibility of the Central Bank is to maintain the health of the banking system and regulating the purchase and sale of bonds. The interest rates are controlled to balance the markets. According to the Monetary Policy Report to Congress, “The Federal Open Market Committee (FOMC) maintained a target range of 0 to ¼ percent for the federal funds rate throughout the second half of 2009 and early 2010” while representing forecasted economic decisions to rationalize low levels for longer times on the federal funds rate (Federal Reserve, 2010). Purchases were still being made by the Fed’s to result in improvements to the economy through focusing on mortgages, the real estate market, and the credit market. Predictions by the Federal Open Market Committee depicted low levels on the federal funds rates in early 2010 which would continue for some...

Find Another Essay On Federal Reserve

The Federal Reserve System Essay

2320 words - 9 pages The Federal Reserve System Even before the creation of the Federal Reserve, banks were used by the public just as we use them today. Deposits were made into savings accounts. Loans were taken out to mortgage a home or finance a new business. Banknotes were issued and spent when the public borrowed from the banks. Borrowers spent these banknotes just as paper money is spent today. These bank notes were valued as money since they were backed

The Federal Reserve Essay

1194 words - 5 pages Calls to “End the Fed” have raged for some time now, with most proponents of this movement being part of grassroots movements such as The Tea Party, and the now infamous Occupy Wall Street crowd. Even some elected officials, from both the Democratic Party and Republican Party have questioned the existence of the Federal Reserve, most notably Ron Paul. Most arguments regarding the demolition of the Federal Reserve System revolve around the

The Federal Reserve

1893 words - 8 pages Alexander Hamilton, as Secretary of the Treasury, persuaded Congress to establish the first centralized banking institution (First Bank of the United States) in American in 1791. It was immediately met with suspicion by the farming community, which constituted the large majority of Americans, of being representative of “big money”; when it came up for renewal 20 years later, Congress let its charter expire (Federal Reserve Education.Org, n.d

The Federal Reserve System

729 words - 3 pages The Federal Reserve System is the United States bank. Was created in December 23, 1913 by the congress to provide the nation with a better and stable monetary financial system. The Federal reserve’s is responsible for directing the nation’s monetary policy by persuading money and credit conditions in the economy in tracking down of full employment and stable prices ("Board Of Governors Of The Federal Reserve System", 2014). Also

The Federal Reserve

2256 words - 10 pages Money is the anthem of success. It is the tangible spirit of the American Dream that has heartily inspired the masses, the framework for the pursuit of happiness, and no one regulates it more than the United States’ government. The Federal Reserve is the central bank for the United States and serves to handle the nation’s monetary policies in conjunction with the government’s fiscal policies in order to improve the economy. Even in America’s

Federal Reserve Paper

828 words - 3 pages Running head: FEDERAL RESERVE PAPER PAGE \* MERGEFORMAT 1 FEDERAL RESERVE PAPER PAGE \* MERGEFORMAT 4 Federal Reserve PaperUniversity of PhoenixFederal Reserve PaperIntroductionThis paper will give definition to the purpose and function of money. It will explain how the Federal Reserve manages the monetary system of the United States. This paper will also outline the stated direction of recent monetary policy in this nation. It will list at

Federal Reserve PowerPoint Presentation

4223 words - 17 pages Click to edit Master title style Click to edit Master subtitle style * * * Federal Reserve, Banking and Inflation William Ward Axia College of University of Phoenix ECO 205 Lydia Portee July 27, 2008 * * * Introduction The Federal Reserve Board of Governors Federal Reserve Functions The Money Supply Inflation Cause Effect Controlling Conclusion * * * The Federal Reserve History Mission Ownership Funding Accountability * * * Structure

Federal Reserve and Inflation

861 words - 3 pages PAGE PAGE 3 Federal Reserve and Inflation Federal Reserve and InflationJennifer MyersWestern International UniversityECO/301 Economic TheoryGloria PearsonFebruary 25, 2007What exactly is the Federal Reserve? The Federal Reserve is an agency that is responsible for regulating the system using fiat money. Fiat money is notes issued by the fed. The Federal Reserve is a central bank that oversees the banking system and regulates the quantity of

The Federal Reserve System

1428 words - 6 pages Federal Reserve 5th District - PAGE 1 - The Federal Reserve SystemECONYour UniversityThe Federal Reserve BankThe fifth of twelve satellite banks in the Federal Reserve solar system belongs to our close neighboring city of Richmond, Va. Its function is not unlike its eleven sister banks that are strategically positioned throughout the country, and together form our nations central banking system. Congress put the construct of the Federal

The Federal Reserve - 2337 words

2337 words - 9 pages The Federal Reserve System is the United States of America’s central banking system and as such is one of the most powerful entities in the country. The Fed, as it is informally known, was created with the enactment of the Federal Reserve Act of 1913, aimed at preserving a system of checks and balances and the decentralized power echoed in the US constitution. It was sanctioned largely in response to a series of financial upheavals, in

The Federal Reserve - 1926 words

1926 words - 8 pages Every large economy and most small economies have central banks. Some of the better known central banks are the European Central Bank, the Bank of England, and the Bank of China. The Federal Reserve, well-known as The Fed is the U.S. Central Bank. A central bank is an organization responsible for overseeing the monetary system of a nation. Conspiracy theories describe the Fed as men in top hats and black suits, secretly meeting in dark smoke

Similar Essays

Federal Reserve Essay

1669 words - 7 pages In America today, many people have heard of the Federal Reserve, yet a portion of Americans do not know the history, the structure or the entire function of the central bank. The Federal Reserve’s purpose was to provide the nation with a safe, more flexible and more stable monetary financial system. Whether or not the Federal Reserve today has provided that, or if it is needed, is still being debated today. Though good or bad, the Federal

Federal Reserve Essay

5506 words - 22 pages Seal of United States Federal Reserve System SYSTEM PUBLICATION The Federal Reserve System Purposes and functions The Federal Reserve System PURPOSES FUNCTIONS Board of Governors of the Federal Reserve System Washington, D.C. First Edition, May 1939 Second Edition, November 1947 Third Edition, April 1954 Fourth Edition, February 1961 Fifth Edition, December 1963 Sixth Edition, September 1974 Seventh Edition, December 1984 Eighth Edition

Federal Reserve Paper

1115 words - 4 pages Running head: FEDERAL RESERVE PAPER PAGE \* MERGEFORMAT 1 FEDERAL RESERVE PAPER PAGE \* MERGEFORMAT 6 Federal Reserve PaperSanjeet K. SinghEco/212October 25, 2010Ronda JantzFederal Reserve PaperMoney, Money, Money. What exactly is money? Where does it come from? Who regulates money? These questions are in the minds of every individual at one point of time or another. The purpose of this paper is to address what money is, the importance and

The Federal Reserve System Essay

2023 words - 8 pages After the Revolutionary War, many of the country’s citizens were in great debit and there was widespread economic disruption. The country was in need of an economic overhaul and the new country’s leaders would need to decide how to do this to ensure the new country did not fall apart. After two unsuccessful attempts at a national banking system, the Federal Reserve System was created by the Federal Reserve Act of 1913. Since its inception