The Federal Reserve

May 19th, 2015
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Salus University
Course: general
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The Federal Reserve is the protector of the largest economy of the world and handles the economic risks and opportunities in the USA. Federal Reserve devises monitory policies to control GDP, interest rates and inflation in accordance with the amount of money supply in the economy.

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The Federal ReserveAbstractThe Federal Reserve is the protector of the largest economy of the world and handles the economic risks and opportunities in the USA. Federal Reserve devises monitory policies to control GDP, interest rates and inflation in accordance with the amount of money supply in the economy. It functions to provide collaborations and communications amongst local banks and regulates them to standard banking processes and prepares them to contingency planning in case of any major recession in the economy. Federal Reserve also identifies the risks or opportunities in the financial market and assists the governmental institutions financially. The tools to run economy in effective manner are to identify the factors playing role in economic expansion or regression. The economic indicators such as inflation, interest rates, employment rates, Gross Domestic Growth (GDP) and investments in the economy are the major identifier to economic handling. Professional economic experts form the executive decision making committee of the Federal Reserve who evaluate the statistical data retrieved from analysis and research to formulate monitory policy which in case of lower GDP growth is to raise money supply and increase investments. On the contrary, if inflation is to be controlled, The Federal Reserve will reduce the money supply to reduce investments and employment rates to regulate inflation. Monitory policy has combined effects with governmental fiscal polic

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