Monetary and Fiscal Policy The Monetary and Fiscal Policies, although controlled by two different organizations, are the ways that our economy is unplowed under control. Both policies have their strengths and weaknesses, some situations favoring use of some(prenominal) policies, but most of the time, only one is necessary. The monetary insurance is the act of regulating the money tack on by the federal Reserve Board of Governors, currently headed by Alan Greenspan. One of the master(prenominal) responsibilities of the Federal Reserve System is to regulate the money supply so as to keep production, prices, and employment stable.
The Fed has iii tools to manipulate the money supply. They are the reserve requirement, open securities industry operations, and the discount rate. The most powerful tool available is the reserve requirement. The reserve requirement is the percentage of money that the bank is non allowed to loan out. If it is lowered, banks are required to keep less money, and so more ...If you want to get a full essay, rewrite it on our website:
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