Role Of Federal Reserve
Many countries around the world have central banks that are responsible for transaction with country's national reserves, supervising and regulating other banks and controlling their monetary policies. US Federal Reserve is similar with other central banks but it also has its unique differences. The Federal Reserve is a quasi-governmental and, unlike many of the world's central banks, is a decentralized central bank ("Federal Reserve," 2006). It had power to come up with own decisions and action, though it has to report to congress about them. Main Fed's responsibilities include setting the discount rate, and the reserve ratio, implementing monetary policy by open market operations, control the amount of currency that is made and destroyed on a day to day basis, and maintain consistent payments system ("Federal Reserve," 2006).
Three tools that Federal Reserve uses to control the economy that grows too quickly or too slow are changing interest rate, changing its reserve......
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