Description
The charter of the U.S. Federal Reserve Bank makes it responsible for monetary policy and the maintenance of low unemployment. How do these responsibilities conflict with each other?
-please you at least 3-6 academic/ financial references in APA format.
Explanation & Answer
Thank you for working with me.
Running head: FEDERAL RESERVE BANK POLICY CONFLICTS
Federal Reserve Bank Policy Conflicts
Name:
Institutional affiliation
1
FEDERAL RESERVE BANK POLICY CONFLICTS
2
Federal Reserve Bank Policy Conflicts
The Federal Reserve Bank of USA is the supreme and among the most powerful banks in
the world. Its mandate is to ensure a stable and flexible monetary and financial system in the
country through the setting of new rules and implementing existing ones so as to improve the
economic performance. It is the responsibility of the Federal Open Market Committee (FOMC)
to set policies that aim at maintaining and enhancing employment rates in the economy and
maintain stable long term interest rates in the USA economy (Dennis, 2006). All these functions
aim at ensuring that the rate of employment is high and the monetary policies are regulated
continuously to ensure improved economic conditions for USA households and businesses.
Many different concepts in unemployment relate to monetary policy. Hence, the function
of FRB to control inflation through the use of monetary policy and the maintenance of low
unemployment rate brings about a conflict between the two functions. The use of expansionary
monetary policy requires that the Central Bank reduces the interest rates to c...
Review
Review
