What Does The Federal Reserve Do To Stimulate The Economy

Superior Essays
Introduction
I have chosen Apple Inc. as the company of my preference. Apple Inc. is a United States based company that designs, manufactures and markets mobile communications and media devices, personal computers, portable music players, and sells a variety of related music software, services, peripherals, network solutions and third party digital content and applications. Some of the Apple Inc. products and services include I phone, I pad, IPod, Mac, apple TV, portfolio of consumer and professional software applications, and ox operating systems. The company also sells and delivers digital content and applications through the iTunes store, App store; I book store, and Mac app store. The company sells its products worldwide through its retail stores, online stores, and direct sale force and third party cellular network carriers, wholesalers, retailers and value added resellers to its worldwide consumers, (Nesladek & Sharkey, 2010). What does the president and congress do to stimulate the economy? The president and the congress are doing a lot in the stimulation of the economy. The president’s proposal on the stimulation of the economy through creation of jobs is calmly welcomed by many since it’s a positive impact to the economy. Through investment of both the human and physical capital in infrastructure will put people to work now and yield lasting benefits for the economy, increasing growth in the long run. The government and the congress is ensuring that the massive economic hole left by the collapse of the housing bubble and ensuring that the financial crisis and the high unemployment does not continue to limit consumption and investment, (Altshuler, & Bosworth, 2011). What does the president and congress do to contract 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 economy? There are several factors that motivate policymakers to stimulate the economy or contract the economy. The factors include the rate at which the government spending and the government deficit automatically increase during economic downturns due to more demand on social safety net provisions and the falling tax revenues. Another area of motivation to the policy makers is the global economy which makes the sound institutions more critical. Proper institution management makes the policymakers more motivated and hence stimulates the economy unlike the poorly managed institutions which leads to loss of morale hence leading to economy contraction by the policy makers. Based on your research, what does the Federal Reserve say about its policy goals? The congress has established objectives for its monitory policies, maximum employment, stable prices and moderate long term interest rates. In pursuing its objectives, the congress seeks to explain its monitory policy decisions to the public and very clearly. The federal reserve’s stands that clarity in policy communications and decisions to the public facilitates well informed decision making by households and businesses hence reducing the economic and financial uncertainty, increasing the effectiveness of the monitory policy and enhances accountability and transparency, which are essential in a democratic society. What does the Federal Reserve say about the strength of the economy? When it comes to strength of the economy, the Federal

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