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Monetary Policy Paper Mba 501

Running Head: The Federal Reserve and Macroeconomic Factors

The Federal Reserve and Macroeconomic Factors
University of Phoenix

 
Introduction
The Federal Reserve controls the economy of the United States through a variety of tools. They use these tools to shape the monetary policy of the United States in order to promote economic growth and reduce the rate of inflation and the unemployment rate. By adjusting these tools, the Fed is able to control the amount of money in the supply. By controlling the amount of money, the Fed can affect the macro-economic indicators and steer the economy away from runaway inflation or a recession.
The Federal Reserve
The Federal Reserve uses three main tools in order to control the money supply. The first tool is open-market operations. These operations consist of the buying and selling of government bonds to commercial banks and the public. Open-market operations are the most important tool that the Fed can use to influence the money......


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Approximate Word Count: 1460
Approximate Pages: 6 (250 words per double-spaced page)

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