ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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No one wants the other party to win
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free markets can trust that they are acting in the best interest of the economy and not influenced by politics
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It is important to and producers & consumers that they understand who will benefit in advance
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It is not that important as our history shows that it doesn’t matter.
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Detailed explanation-1: -The primary justification for an independent Federal Reserve is the need to insulate it from short-term political pressures.
Detailed explanation-2: -The Bottom Line. Today, the Fed uses its tools to control the supply of money to help stabilize the economy. When the economy is slumping, the Fed increases the supply of money to spur growth. Conversely, when inflation is threatening, the Fed reduces the risk by shrinking the supply.
Detailed explanation-3: -The U.S. central banking system-the Federal Reserve, or the Fed-is the most powerful economic institution in the United States, perhaps the world. Its core responsibilities include setting interest rates, managing the money supply, and regulating financial markets.
Detailed explanation-4: -What is the purpose of the federal reserve? It works to strengthen and stabilize the nations monetary system. It provides financial services to the government, regulates financial institutions, maintains the payment system, enforces consumer protection laws, and conducts monetary policy.
Detailed explanation-5: -Because the nation’s inflation rate over the longer run is primarily determined by monetary policy, the Fed-eral Reserve can work directly to ensure that the U.S. economy ben-efits from low and stable inflation. Low and stable inflation helps the economy operate efficiently.