Describe the Federal Reserve System and Role If Regulation

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1.Describe the Federal Reserve System. How is it structured? How does it work? What is its role in the economic policy? Cite one example where Fed policy was applied and what was its impact on the economy.

The Federal Reserve was created in 1913 creating the Federal Reserve System. It is the nation’s central bank any bank that uses national in their name must become a member of the Federal Reserve. There is a seven member board of governors who are appointed by the President and confirmed by the Senate. The members serve a fourteen year term. The President picks the chairman and the vice chairman and the senate confirms the members for a four year term. Each Federal Reserve Bank has a board of directors, whose members work closely with their Reserve Bank president. These boards are drawn from the general public and the banking community and oversee the activities of the organization. They also appoint the presidents of the Reserve Banks, subject to the approval of the Board of Governors.” Reserve Bank board’s consist of nine members: six serving as representatives of nonbanking enterprises and the public (nonbankers) and three as representatives of banking”. The Federal Reserve works by managing the nation’s money; they regulate banks and influence the economy. They can either raise or lower interest rates to help the economy. It works by controlling money supply it loans money to banks so the banks can loan money to the public. The Federal Reserve can use Monetary Policy to turn the economy around, by making sure to keep the economy growing. The Federal Reserve has three functions in the economy one is to “maintain and provide effective and efficient payment system” too “supervise and regulate banking operations” and the third is to “conduct the nation’s monetary policies”. The Federal Reserve’s actions are to maintain economic growth. I remember back in the seventies things were going good for everyone interest rates were low and every buddy thought it...
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