We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Monetary Policy in the US - Assignment Example

Comments (0) Cite this document
Summary
In order to overcome this problem, FED may develop consensus on the use of different policy tools. This can be achieved through the broadly defining the overall impact analysis of each tool besides conducting empirical research so as to understand how each tool has impact the…
Download paper
GRAB THE BEST PAPER

Extract of sample
Monetary Policy in the US

In order to overcome this problem, it is recommended that the policy implementation shall be incremental in nature with built in mechanisms to set threshold levels to trigger automatic responses where policy do not seem to deliver the desired monetary policy outcomes.
Open market operations is one of the most frequently used tools that is being exercised by any central bank including FED. Open market operations basically involve the buying and selling of securities in open market in order to achieve the different monetary policy outcomes. Open Market Operations tend to provide an opportunity to FED to affect the banking system in following manner:
1. Affecting interest rates: through open market operations, FED basically mop out or in the liquidity within the banking system. By buying the securities, FED basically increase the supply of loanable funds thus interest rates tend to go down for short term period whereas by selling the securities, the liquidity is decreased which than increase the interest rates.
2. Controlling the volume of Credit: Through open market operations, FED basically increase or decrease the volume of credit as it either suck in the excess liquidity from the market or pump in new funds into the system. Through both methods, the overall extent of loanable funds can be increased or decreased in order to achieve the monetary policy objectives of the firm.
3. Open market operations also tend to affect the bank deposits because by floating securities in the market, FED basically take out funds from the banks which indirectly affect the deposits of the banks.
Banks are required to keep a certain percentage of their funds as reserve with the FED in order to meet the uncertainties. FED can increase or decrease this percentage with the passage of time and according to the economic situation. Further banks can also borrow from the one window facility at the FED and the rate charged by FED on such funds is called discount rate. ... Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Monetary Policy in the US Assignment Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.net/miscellaneous/385424-monetary-policy-in-the-us
(Monetary Policy in the US Assignment Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.net/miscellaneous/385424-monetary-policy-in-the-us.
“Monetary Policy in the US Assignment Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.net/miscellaneous/385424-monetary-policy-in-the-us.
  • Cited: 0 times
Comments (0)
Click to create a comment
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Monetary policy
Moral hazard occurs when borrowers are actually tempted to engage in activities that are undesirable for the lender while adverse selection takes place before any transaction occurs whereby the borrowers are most likely to produce negative outcome for the lender who is most likely seeking loans and are most likely to be chosen for the loans requested for (Haan & Eijffinger, 2005).
10 Pages(2500 words)Assignment
Monetary Policy for Global Financial Crisis
165. 9 Mishkin, F., 2007, Monetary policy strategy, Massachusetts, MIT Press pp.243. 9 Reynolds, A., 2001, The Fiscal-Monetary Policy Mix: Cato Journal, Vol. 21, Florida: Fall. Pp. 45-67. 9 Monetary Policies for the Global Financial Crisis Introduction The United States controls most of the world’s economies, meaning that an economic crisis born there will result in the disability of the entire world.
7 Pages(1750 words)Assignment
US monetary policy
The shareholders of federal reserves are private banks (Solomon 1996). Almost all shareholders are private banks, and government owns none of their stock. When the government money gets limited, the treasury issues bonds to the dealers, which auction them off (Solomon 1996).
3 Pages(750 words)Term Paper
What Lessons can be learned from the Global Financial Crisis of 2007-08, About the Effectiveness of the Transmission Mechanism of Monetary Policy
What Lessons can be learned from the Global Financial Crisis of 2007-08, About the Effectiveness of the Transmission Mechanism of Monetary Policy? The global financial crisis, which occurred during the year 2007-2008, has been recognised as one of the worst crises ever faced by the word economy.
10 Pages(2500 words)Assignment
Monetary policy for GFC
The disaster translated to a down turn in many stock markets, intrinsic topple of economies alongside a decline in all aspects of money dependent sectors of the world as a whole. The
7 Pages(1750 words)Assignment
Monetary policy
The Fed tightens or eases its financial conditions by raising or lowering short-term interest rates. The Fed’s ability to pay interest on bank reserves helps in putting upward pressure on market interest
2 Pages(500 words)Assignment
US HEALTH POLICY
The former caters for the elderly while the latter provides coverage for many of the America’s poor. However, a large number of working Americans are usually left out due to their age and income. These are the working poor. They have to depend
1 Pages(250 words)Assignment
Assignment 2: The Fiscal and Monetary Policy and Economic Fluctuations
Monetary policy on the other side refers to actions that can be taken by the central bank to either slow or ignite the economy. Both Fiscal and monetary policies have a way of affecting the economy either positively or negatively. With reference to the
4 Pages(1000 words)Assignment
Monetary Policy, Fiscal Policy, Business Cycles, and Economic Growth
Multinational corporations in Malawi will reduce their investments. Foreign Direct Investment stimulates economic growth and reduces the level of poverty. So a decrease in foreign direct
2 Pages(500 words)Assignment
Monetary policy&fiscal policy
f whether the program has anything to contribute towards the direction of the economy declined to it having much contribution stating that the view of Fed in the economy is concerned about what has been for some time. He views this as being middling. He notes in relation to
2 Pages(500 words)Assignment
Let us find you another Assignment on topic Monetary Policy in the US for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us