The Federal Reserve Essay Example | Topics and Well Written Essays - 1250 words

The Federal take into account - Essay ExampleAn important policy that has been implemented by the provide is the piano money policy. The easy money policy is important to allow money to flow through the economy at a lowered interest rate. The lowered interest rate allows money to be lent at a rate that is more appealing. The FED likely issued the easy money policy to increase investing and spending. organism up to(p) to achieve loans at a lower rate allows consumers to obtain loans. The hopes giving the loans also benefit. The banks ability to offer the loans at a lowered rate increases the amount of loans that the bank is able to issue. This type of policy reduces the amount of money that is held in the Federal Reserves. Allowing for more money to advertise and better lending rates cigaret be a good thing in an feat to boost a struggling economy. Allowing more money to circulate and spending to happen seem to be nothing but great news. This is not always so. The free flowing money and spending can lead to inflation. Inflation leads to higher prices. This is so because the dollar becomes worth little. The dollar being worth less means that it will costs more for an item. An example of this is purchasing a loaf of bread. In a stable economy were inflation is not an issue, a loaf of bread can be bought for round $3.00. When inflation sets in, the same loaf of bread can be worth $4.00 or $5.00. ... 2010 2.63% 2.14% 2.31% 2.24% 2.02% 1.05% 1.24% 1.15% 1.14% 1.17% 1.14% 1.50% 1.64% 2009 0.03% 0.24% -0.38% -0.74% -1.28% -1.43% -2.10% -1.48% -1.29% -0.18% 1.84% 2.72% -0.34% 2008 4.28% 4.03% 3.98% 3.94% 4.18% 5.02% 5.60% 5.37% 4.94% 3.66% 1.07% 0.09% 3.85% 2007 2.08% 2.42% 2.78% 2.57% 2.69% 2.69% 2.36% 1.97% 2.76% 3.54% 4.31% 4.08% 2.85% 2006 3.99% 3.60% 3.36% 3.55% 4.17% 4.32% 4.15% 3.82% 2.06% 1.31% 1.97% 2.54% 3.24% 2005 2.97% 3.01% 3.15% 3.51% 2.80% 2.53% 3.17% 3.64% 4 .69% 4.35% 3.46% 3.42% 3.39% 2004 1.93% 1.69% 1.74% 2.29% 3.05% 3.27% 2.99% 2.65% 2.54% 3.19% 3.52% 3.26% 2.68% 2003 2.60% 2.98% 3.02% 2.22% 2.06% 2.11% 2.11% 2.16% 2.32% 2.04% 1.77% 1.88% 2.27% 2002 1.14% 1.14% 1.48% 1.64% 1.18% 1.07% 1.46% 1.80% 1.51% 2.03% 2.20% 2.38% 1.59% 2001 3.73% 3.53% 2.92% 3.27% 3.62% 3.25% 2.72% 2.72% 2.65% 2.13% 1.90% 1.55% 2.83% 2000 2.74% 3.22% 3.76% 3.07% 3.19% 3.73% 3.66% 3.41% 3.45% 3.45% 3.45% 3.39% 3.38% It is important for the FED to make sure there is enough money in the Federal Reserve System to end out the money that is floating around throughout the American economy. A monetary policy is confide into affect for an important reason. A monetary policy allows for the government to control certain different aspects of the economy. most of the aspects that are controlled are the Federal