Starbucks Monetary Policy Analysis

Decent Essays
Starbucks organization is based in Seattle, Washington. It mainly deals with coffee, (Gilbert, 2008). It purchases coffees, roasts them and sell them internationally through global chain and retail outlets. The coffee it deals with are mainly specialty coffees which can be used to manufacture beverages, whole bean food items, as well as ground coffee. Due to its aim of changing the whole world’s perspective of viewing coffee and consuming coffee, it has been quite successful in most activities that it has been quite successful even in harsh economic times across the world. Though it faces stiff competition around the world, Starbucks has gained the support of the federal government in carrying out global operations. Therefore, this paper shall focus on the role of the government and congress in the economy, developing policy goals, …show more content…
The Federal Reserve board controls the monetary policy whereby they control the money supply. Firstly, they can change the reserve requirement for various banks and institutions. A certain percentage of depositors to the banks’ must be kept by the banks. This aims at maintaining a required level of liquidity by the banks. The reserve requirement can be reduced to stimulate the economy as this allows banks to lend more of their money to various individuals and companies including Starbucks. The Federal Reserve can also change the discounting rates to promote the economy in business cycles, (Mankiw, 2015). To stimulate the economy, the body reduces the discounting rates and it increases the rate when it wants to contract the economy. Federal open market committee can also be used in an aid to control the economy. It purchases and sells the government securities in the secondary markets so as to control the money supply in the economy. In order to stimulate the economy, the Federal Reserve will reduce rates of

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