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U.S. Monetary Policy and What the Federal Reserve does.

According to the Congressional Budget Office monetary policy is, "The strategy of influencing movements of the money supply and interest rates to affect output and inflation. An "easy" monetary policy suggests faster growth of the money supply and initially lower short-term interest rates in an attempt to increase aggregate demand, but it may lead to a higher rate of inflation. A "tight" monetary policy suggests slower growth of the money supply and higher interest rates in the near term in an attempt to reduce inflationary pressure by lowering aggregate demand." In the United States it is the Federal Reserve System that is responsible for defining and implementing these policies. In the United States the Federal Reserve is made up of a Board of Governors, which consists of seven members, all of whom are appointed by the president and confirmed by the Senate. Of these seven, the president appoints one to be chairman of......

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Approximate Word Count: 457
Approximate Pages: 2 (250 words per double-spaced page)

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