Macroeconomics- Business & Finance
Unit vi. Monetary Policy: What works?
Monetary policy by the US Federal Reserve is important for the US economy. However, economists disagree about several aspects of Federal Reserve decision- making powers including the composition of the Federal Reserve committees, Federal Reserve goals, and the actual impact of Federal Reserve policy on the economy. Address the following questions for this week’s assignment:
· Provide a brief (one paragraph) overview of this week’s material.
· Should the Federal Reserve Board focus exclusively on the problem of inflation?
· What other goals are appropriate for Federal Reserve policy?
· What is the appropriate goal for the inflation rate?
· How should the Federal Reserve Board use its policy to achieve its goals?
· How effective is the Federal Reserve monetary policy in achieving its goals?
· Is the composition of the decision-making bodies of the Federal Reserve
appropriate for a democracy? For information from the Federal Reserve Board itself, go to the Board of
Governors of the Federal Reserve System at: http://www.federalreserve.gov/
The Board of Governors site contains the Fed’s Beige Book, Congressional testimony and speeches of Federal Reserve Board members, Federal Open Market Committee (FOMC) information, press releases, current interest rate information, and general information about the Federal Reserve System. A PDF-format version of The Federal Reserve System: Purposes and Functions, a thorough overview of the Federal Reserve System, is available by chapter or as a single document.
In addition, the site contains a summary of Federal Reserve regulations. Particularly useful is the publication, “Purposes and Functions of the Federal Reserve System” at: http://www.federalreserve.gov/pf/pf.htm
And, “Monetary Policy: An Introduction”
http://www.frbsf.org/publications/federalreserve/monetary/index .html
Criticism of the Federal Reserve Board comes from both conservatives and liberals sides.
For a liberal viewpoint see the Financial Markets Center at:
http://www.communityinvestmentnetwork.org/nc/single-news-item- states/article/financial- markets-center/?tx_ttnews%5BbackPid%5D=326
For a conservative viewpoint, see the Shadow Open Market Committee at: http://shadowfed.org/ Your final product will be a paper that:
· Addresses each of the questions above in total.
· Is APA fortatted.
· The body is to be 2 pages minimum.
The requirements for your assignment are:
1. Answer each question fully
2. Define the overall subject of each question.
3. Cite at least four (4) resources from this week’s materials
