Money Supply, Monetary Policy and Inflation.

May 15th, 2015
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The Federal Reserve regulates the economic conditions in USA by controlling the amount of circulating money in the financial market through devising a practically feasible Monetary Policy.

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Money Supply, Monetary Policy and InflationEconomic Policies of the Federal ReserveThe Federal Reserve regulates the economic conditions in USA by controlling the amount of circulating money in the financial market through devising a practically feasible Monetary Policy. The US economy is facing a downfall since last few years it needs to be controlled which concerns the decision making committee of the Fed. The Federal Reserve has increased the money supply in the economic stream by announcing the policy called Quantitative Easing (QE). Now to regulate and control the economy into positively constructive direction, the Fed should keep a strict monitoring onto this policy so that the amount of circulating money does not pass a provided limit. The substantially increasing money supply in the market reduces the interest rates by the banks which allows more people to take loans which certainly increases the amount of available money in the public and people start investing in their businesses to grow economically. This increase in investments improves the employment rates because more opportunities in businesses are available for labor. The increased demand in labor cau

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