What Does The Federal Reserve Do To Stimulate The Economy
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For the president and the congress to contract the economy, they have to control the supply of the money within the country that the interest rates and other methods, which have profound influence on the business cycle. Through money contraction, they create a recession by dollars that would cover the financial transaction between customers and businesses which drives up unemployment.
What does the Federal Reserve do to stimulate the economy?
The Federal Reserve stimulates the economy through the ensuring that maximum employment and stable prices are maintained. The federations also ensure that there is an open market operation and the funding of the federations is kept. The federation also ensures that the change in the interest rates does not affect the economy.
What does the Federal Reserve do to contract the economy?
Through the supporting of open air markets purchases and the pushing for reforms in the banking system, which involves a unified banking system that allows for nationally chartered banks and other government systems are the main Federal Reserve contribution in the contraction of the economy.
What motivates policymakers to stimulate the economy or contract the