Since January 2001, education, finance, Medicare, social security, and as well as foreign affairs have been a series of problems. In addition, we have to consider that at the end of the fiscal year in 2001 we were “$5 trillion” in debt. It is 2015 and we tripled our national debt to “$18 trillion.” The rate we are going we are estimated to increase that number to about “$22 trillion in 2020.” (Office of Management and Budget ) (US Debt Clork) As taxpayers, business owners, and state and local government employees of the United Sates, we need to understand a bit about the fiscal health of our country. For instance, it is likely that your state will need to raise taxes in the future to pay its bills. Will there be enough cash for these
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The Federal Open Market Committee (FOMC) adjust interest rates, reduce unemployment, and lowers inflation. Monetary policy is to play a key role in the health of the United States economy, meaning the “nation’s central bank, does influence the amount of money and credit it in the U.S. economy.” (Federal Reserve Education ) On one hand, it is a good thing the Federal Reserve can react to financial collapse in a speedy way. While however, the people can view this as a motive or power-hungry. Expansionary monetary policy has three tools that help rebuild an economy. “The effect causes the increase in money supply, lower interest rate, and a rise in the overall aggregate demand (AD). This will boost growth as measured by Gross Domestic Product (GMP).” (Amadeo) Open market operations are flexible, and the most often used tool of monetary policy. By reducing interest, this will help encourage consumer spending. The discount rate is the “interest rate charged by Federal Reserve Banks depository institutions on short-term.” (Federal Reserve Education ) This is usually the last results when borrowing money for the banks. Reserve requirements are the “portions of deposits that banks must maintain either on their vaults or on deposit at a Federal Reserve Bank.” (Federal Reserve Education ) When the Feds fund rates become cheaper than usually banks are more willing to give more money to lend. Understanding the concept that each decision the government makes has an effect on the citizens of the United
The Federal Open Market Committee (FOMC) adjust interest rates, reduce unemployment, and lowers inflation. Monetary policy is to play a key role in the health of the United States economy, meaning the “nation’s central bank, does influence the amount of money and credit it in the U.S. economy.” (Federal Reserve Education ) On one hand, it is a good thing the Federal Reserve can react to financial collapse in a speedy way. While however, the people can view this as a motive or power-hungry. Expansionary monetary policy has three tools that help rebuild an economy. “The effect causes the increase in money supply, lower interest rate, and a rise in the overall aggregate demand (AD). This will boost growth as measured by Gross Domestic Product (GMP).” (Amadeo) Open market operations are flexible, and the most often used tool of monetary policy. By reducing interest, this will help encourage consumer spending. The discount rate is the “interest rate charged by Federal Reserve Banks depository institutions on short-term.” (Federal Reserve Education ) This is usually the last results when borrowing money for the banks. Reserve requirements are the “portions of deposits that banks must maintain either on their vaults or on deposit at a Federal Reserve Bank.” (Federal Reserve Education ) When the Feds fund rates become cheaper than usually banks are more willing to give more money to lend. Understanding the concept that each decision the government makes has an effect on the citizens of the United