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Running head: FEDERAL RESERVE CONTROL
Federal Reserve Control
FEDERAL RESERVE CONTROL
Federal Reserve control
The federal government reserve controls the money supply in the economy. The system
manages the commercial banks and lending institution to reserve specific reserve ratio against
potential withdrawals. Through this process, the Fed controls the quantity of money supplying in
the economy. The Fed can increase the money supply by buying issued treasury bills or
securities from large financial dealers conversely it can reduce the money supply by selling the
When there is too much money supply in the economy, people increase their expenditure.
This leads to an increase in demand against low supply rate. Shortage is created and the available
goods prices increases leading to inflation.
Analysis of the history of GDP, Interest rates, savings, investment real interest rates and
Analysis has shown various investment and government strategies to regulate the amount
of money in the economy and its impact on the economy. In this case, the paper will focus on the
United States economic forecast of next five year period by discussing current and past economic
state. Forecasting will affect the set plans of different industries and service sectors. Due to the
current market times, the gross domestic product (GDP) is expected to fluctuate and change on a
regular basis in the next five-year analysis plan.
The gross domestic product has slightly improved in the last quarter; this is due to
financial volatility and resilience in the global economic crisis and slowdown. According to the
national bureau of statistics, the federal government expects the gross domestic product to
increase by 0.2 percent in 2018. Last year the reports indicated that the economic growth range
FEDERAL RESERVE CONTROL
was 2.0% and 2.3%. Additionally, Forecast panelist expects the U.S GDP to grow by an
estimated 2.0% in 2018.
Employees have adopted a more reliable mechanism to improve their savings and raise
their financial standards through increased savings and controlled expenditures. Consequently
organization has adopted defined-contribution plans for their activities.
Currently, the U.S economy has been slowly changing and growing in conjunction with
forecast panelists. Every party is giving the reasons behind the issues and the solutions towards
such problems. In 2014 an increase of 2.4 % was reported from the previous 2.3% in 2013. Some
of the causes of this increase were as a result of increased investment in real estate,
manufacturing a and financial sector. Secondly, the reports published suggest that the increased
consumer spending rate contributed to the enormous growth of the economy in the United States.
Additionally, exports together with increased government expenditure contributed to the
variation. However, the gains were offset by increased imports by Federal government departs
from the bureau.
The United States GDP stands at more than 17940 billion dollars, and the value
represents 28.95 percent of the world economy. Since 1960 the economy has increased the GDP
by 6000 billion dollars which is a positive move, but with the ...