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The Federal Reserve
-What is the mission, or goals, of the Fed?
The Fed concerns itself with the enhancement of “the stability, integrity, and efficiency of the nation’s monetary, financial, and payment systems so as to promote optimal macroeconomic performance” (Federal Reserve, 2018).
-Explain the structure of the Fed and the hierarchy of governance.
The Federal Reserve entities charged with decision making regarding the nation’s economic stability are; the Federal Reserve Board of Governors, The Federal Reserve Banks, and the Federal Open Market Committee (Federal Reserve, 2018). The Federal Reserve System is overseen by Congress.
-Is the Fed a public or private entity? Who owns the Fed?
The fed is a public entity. The Fed is an independent institution, and is not owned by any specific person/entity. It is overseen by Congress.
-If issuing Federal Reserve Notes stimulates the economy, why not print money indefinitely?
Printing money indefinitely would not stimulate the economy. Instead it would cause inflation, which is essentially the increase in the prices of goods as well as services.
-Under what conditions would the Fed purchase securities like U.S. treasuries?
According to the Federal Reserve (2018), “the Federal Reserve purchases...
treasuries has the effect of injecting money into the economy. Therefore, the Fed would purchase U.S. treasuries when there is need to enhance money supply, i.e. when there is need to stimulate public spending and spur economic activity.
-How does the Fed regulate and supervise banks and why is this important?
The Fed regulates and supervises banks through its Division of Supervision and Regulation (Federal Reserve, 2018). Towards this end, it is responsible for the development of guidelines and policy statements meant to oversee the nation’s financial and banking structure. The said supervision is critical as it not only promotes, but also enhances the entire financial system’s safety and stability (Federal Reserve, 2018). Further, the Feds regulatory and supervisory efforts come in handy in the further enhancement of the stability as well as growth of the nation’s economy.
-What services does the Fed provide to our country’s financial system and how did it come to be known as the “Bankers Bank”?
Essentially, the Fed is key towards the promotion of the nation’s financial system stability and safety – a role it largely…
References
Federal Reserve (2018). About the Fed. Retrieved from https://www.federalreserve.gov/aboutthefed.htm
Federal Reserve Board is the most powerful financial institution in the country and is actually the Central bank of United States. This institution is responsible for regulating financial system of the country by formulating monetary policies and by changing the fund rates. The Fed is not completely independent and works together with the administration and the Department of the Treasury. It is responsible for formulating and implementing monetary policies in
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" (Structure of the Federal Reserve System) The 12 Federal Reserve Banks extend banking service to the depository institutions and also to the federal government. To the financial institutions it takes the responsibility of maintaining reserve and clearing out accounts and entails various payment services incorporating checks, electronically transferring funds and circulating and receiving coins and currency notes. As the banker of the Federal Government they function as fiscal agents. They