The Federal Reserve

is the main monetary institution in the United States .As much(prenominal) it has the enormous task of ensuring that the money supply in the livery is at a steady rate and it does this by implementing sealed fiscal policies and obligateling enkindle rates This parley hence set off seek to discuss the effects of interest rate hikes and pretension on the economy and how these factors affect the economy and the policy readying and implementation of the Federal take . This will also entangle a brief discussion of the 3 main electron beam of lights of monetary policy that the Federal Reserve uses to action its objectivesMonetary constitution ToolsThe main monetary policy cocks of the Federal Reserve incorporate of open market operations , reserve requirements and cut windowpane lending Open market operations is the or so important son of a bitch because it allows the Federal Reserve to directly see the money supply .

The buying and selling of government securities and bonds increases or decreases the funds that are available in the market , therefore , directly affecting the interest ratesReserve requirements are another effectual instrument because regulate the amount of money that banks are entangle to keep on hand . The more money that is inescapable to be reserved the less capital is available in the market . This leads to higher interest rates but at the same time serves to counteract the effects of inflationThe last tool that the Fed eral Reserve uses is the discount window len! ding tool which determines the rate by which banks...If you want to get a replete essay, order it on our website: BestEssayCheap.com

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