Monetary Policy And Monetary Policy

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The two most powerful tools in our government’s tool box is monetary and fiscal policy. Monetary policy and fiscal policy influence our economy significantly. Monetary policy is the government policy that adjusts the stock money to control inflation, increase economic growth, and promote the true purpose of the national economy. It deals with the management of interest rates and total supply of money in circulation , that is generally carried out by the central banks ,like the Federal Reserve. The theory behind the monetary policy is incentivizing individuals and businesses to borrow and spend. Given in the textbook, fiscal policy is another governmental policy which deals with the concerns of raising revenues and another governmental …show more content…
The government needs to control how the money circulates. So the economy can grow , and continue to flourish. We do not need a repeat of the Great Recession which started in 2007 and ended in 2009. The United States economy has made steady progress out of the recession. More slowly than expected. Not necessary labor and capital resources have been reduced. And unemployment has fallen to low levels. The inflation rate has moved very low. The economy makes America great. America is becoming great again. I think it would make more sense for the United States to emphasize today to use a monetary policy when crafting a macroeconomy policy because there is an unconventional tool of monetary policy when the standard policy does not work. Called quantitive easing. The basis of Quantitative Easing is that it will help the economy recover. The economy is still recovering from the Great Recession, despite being over more than 3 years ago. Quantitive Easing is kind of unconventional, but it works. Quantitive Easing is the idea of the Feds buying lots of exciting Treasury and mortgaged bonds in the open market, …show more content…
It is where the bank goes to for the last resort. There are many hand tools of monetary policy which influence demand, like supply, price of money, and credit. Which are needed in order to direct a nation’s economy objects. In order to do this the federal reserve must use three of the tools. Open Market Operations which are essentially used for buying government issues securities. Then there is discount rate which is essentially the interest rate that banks and other depository institutions are charged to borrow from the Federal Reserve. And finally reserve requirement which is the amount of money that a depository institution is obligated to keep in Federal Reserve vaults. Monetary policy influences supply, demand, and the cost of money. It affects the state of a country’s economic affairs in a good way if things are done properly. The Feds influence the economy. The Feds influence the economy in a good way. To sum it up, a monetary policy should be emphasized today because the economy will continue to flourish. Since monetary policy allows more spending and more money the economy will grow to a certain extent. When our economy grows, It will make America more empowering. We want America to be empowering. So lets hope the United States government emphasizes a monetary policy and uses that approach because it will help

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