Thursday, April 4, 2013

This essays talks about how the monetary policy is used by Federal Reserve in America.

The financial policy is an important policy beca practice it controls the country economy. In America the monetary policy is control by the federal Reserve. Using the tools of the monetary policy, the federal Reserve foundation make believe the volume of money and credit and their price interest order in America. So therefore the Federal Reserve influences role, getup and the general aim of prices.

It is important that the Federal Reserve use the monetary policy in the United States of America because if they do not use this policy, America will not take on a stable economy. When your country does not become a stable economy, you tend to find high levels of unemployment, low spending and little business activities and investment. For example, If America does not have a stable economy, foreigners would tend to think twice before spend in your country because America will not have stable prices. So therefore it is a must for the Federal Reserve to use the monetary policy

The Federal Reserve clean-cut market committee makes monetary policy. They basically carry erupt the monetary policy in America. The monetary policy has twain basic goals: to provoke maximum output and employment and to promote stable prices.

In the long run, the level of output and employment in the economy depends on factors other than monetary policy.

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These include applied science and peoples preferences for saving, risk, and work effort. So, maximum employment and output means the levels unvarying with these factors in the long run.

One minor problem about the monetary policy is that it cannot advert either output or employment in the long run; but it can affect them in the short run. For example, when demand contracts and theres a recession, the Fed can stimulate the economy--temporarily--and help push it back toward its long-run level of...

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