Economics and Monetary Policy Discussion

Description

Watch the attached video then click on the above link “The Fed ” and create a thread with at least one page answering and explaining the following:What is the mission, or goals, of the Fed? Explain the structure of the Fed and the hierarchy of governance.Is the Fed a public or private entity? Who owns the Fed? If issuing Federal Reserve Notes stimulates the economy, why not print money indefinitely? Under what conditions would the Fed purchase securities like U.S. treasuries?How does the Fed regulate and supervise banks and why is this important?What services does the Fed provide to our country’s financial system and how did it come to be known as the “Bankers Bank”?Visit the debt clock website at http://www.usdebtclock.org/ (Links to an external site.) and locate the category M2. This is the present money supply in the hands of the public. Using a timer determine how much the money changes in 1 minute. Is it increasing or decreasing? What do you think this means for the overall economy?After you post your narrative, reply to at least two other students comments. Explain why you agree, or better yet, find others that take a different position and explain why you disagree. ( I do need help on the comments and I will 2 post provide this. It should very short like 5 to 10 sentences only)

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Student 1
1. The Fed’s goal is to establish and maintain the public confidence in our nation’s
monetary and banking system as well as provide a stable, healthy, and growing
economy
2. A decentralized central bank consisting of two primary parts: a board of governors
who guide most of the Fed’s policies and 12 regional federal reserve banks and their
branches which provide services to banks and the public in their regions
3. The fed is both public and private which works independently within the government
but not of it. The board of governors are appointed by the president and confirmed
by the senate. The 12 banks and the citizens on their boards of directors show the
private sector. They work with each other to establish monetary policy for the nation,
provide financial services, and supervise banks
4. When the supply of money grows faster than the production of goods and services
prices start to rise which can lead to inflation and make money worthless
5. If there is too little moneyin circulation, which could lead to a recession, the fed will
buy securities to put money into circulation
6. The fed monitors banks and bank holding companies and the US operations of
foreign banks. They check financial records, potential risks of investments, and
checking to see if they are following laws. It can be monitored off sight or on the
property and recieves a grade. This is to make sure our economy stays in tact and
money isnt being wasted or thrown away legally or illegally
7. The Fed plays a roll in the nations payment system between banks via cash or
check, giving it the name “Bankers’ Bank”. IT also acts as the bank for the US, pays
checks drawn on the treasury, facilitates the collection of federal taxes, and is
responsible for issuing, servicing, and redeeming treasury securities.
8. The money supply in the hands of the public went up around 4.8 million in 1 minute.
This possibly could mean inflation since money in circulation is increasing at a
significant rate.
Student 2:
1. The Fed’s mission is to establish and maintain the public’s confidence in our nation’s
monetary and banking system. It also includes responsibility for providing a stable,
healthy, and growing economy.
2. The structure of the Fed consists of two primary parts. A board of governors, which
guides most of the policies of the Fed. The second part is 12 regional federal reserve
banks and their branches. The board of governors is appointed by the president and
confirmed by the senator. This represents the public of government sector. The 12
reserve banks and their boards of directors represent the private sector.
3. The board of governors is appointed by the president and confirmed by the senator.
This represents the public of government sector. The 12 reserve banks and their boards
of directors represent the private sector. The Fed is not owned by anyone.
4. Although issuing Federal Reserve Notes stimulates the economy, it can lead to
inflation, causing the prices of goods to rise.
5. If the Fed determines that there is too much money in circulation, it will sell securities.
This takes excess money out of circulation and helps stabilize the economy. However if
there is too little money, the Fed buys security. This puts money back into circulation,
which also stabilizes the economy.
6. The Fed monitors banks and bank holding companies and the U.S. operations of firm
banks. Federal examiners look at financial records, potential risk of bank investments,
and if the bank is following applicable laws. Each bank receives a rating. If a problem is
discovered, the Fed will demand that the bank take corrective action. It is important
because it maintains a banking system that is capable of supporting economic growth.
7. The Fed plays a vital role in transferring funds or payments from one bank to another.
Because of this role, the Fed is often referred to as the “Banker’s Bank.” One of its roles
is to act as the fiscal agent, or the bank for the United states. It maintains the U.S.
Treasury’s accounts. The Fed pays checks gone on the Treasury, facilitates the
collection of federal taxes, and is responsible for issuing, servicing, and redeeming
treasury securities.
8. M2 increased by roughly $5 million. This means that the money supply is rapidly
increasing, which can cause the prices of goods to rise and possibly lead to inflation.

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Tags:
economics

governance

Monetary policy

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