Federal reserve system Essay

User Generated

genc023

Writing

Description

explain the function of the federal reserve system and what is its goal

explain inflation what occurs during inflation and how it can be controlled  and why 

explain what happens during a recession what occurs during a recession and how it can be controlled or stimulated by the federal reserve system and why


Explanation & Answer:
2 pages
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

Running Head: FEDERAL RESERVE SYSTEM

Federal Reserve System.
Name of the course:
Name of the institution:
Name of the student:

1

2

FEDERAL RESERVE SYSTEM

Federal Reserve System.
1. Explain the function of the Federal Reserve System and what is its goal.
The functions of the Federal Reserve System can be divided into three major categories.
a. Managing inflation.
The Federal Reserve System manages the inflation level within the country through
controlling of credit. It ensures that credit is cheap by lowering the interest rates. By
lowering the interest rates the economy grows faster leading to creation of more job
opportunities. When the economy reaches a level whereby its continued growth
causes inflation, Federal Reserve System uses contractionary monetary policy to raise
the interest rates hence managing inflation.
b. Supervising the banking system.
It oversees all banks that operate within the United States. The federal banking
system is composed of twelve Federal Reserve banks whose work is to supervise and
act as bank of banks to all other commercial banks (Jaremski, & Wheelock, 2017). It
conducts internal and external evaluations to decide whether a bank has enough
capital to continue issuing loans to its customers.
c.

Provide banking services.
The Fed acts as the bank of banks. It provides banking services to all member banks
and promotes a culture of safe banking practices. The Fed regional banks ensures the
implementation of the Fed policies by all banks across the country.

FEDERAL RESERVE SYSTEM

3

The goal of the federal banking system is to ensure stability, efficiency and integrity of the
country’s financial, monetary and payment systems in order to promote a stable economy.
2. Explain inflation what occurs during inflation and how it can be controlled and
why?
Inflation refers to the increase of the prices of goods and services. During inflation the
value of money depreciates which results to a...


Anonymous
Great study resource, helped me a lot.

Studypool
4.7
Indeed
4.5
Sitejabber
4.4

Similar Content

Related Tags