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Summary Week 5 ECO316 Michelle Jackson.docx ECO 316 Effects of the Federal Reserves Monetary Policy on the Financial Institutions and Markets Financial Institutions and Markets (ECO 316) In this final assignment, I will look at the effects that the Fe$7.49
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Summary Week 5 ECO316 Michelle Jackson.docx ECO 316 Effects of the Federal Reserves Monetary Policy on the Financial Institutions and Markets Financial Institutions and Markets (ECO 316) In this final assignment, I will look at the effects that the Fe
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Week 5 ECO316 Michelle J ECO 316 Effects of the Federal Reserves Monetary Policy on the Financial Institutions and Markets Financial Institutions and Markets (ECO 316) In this final assignment, I will look at the effects that the Federal Reserve has on The US economy and financial syste...
week 5 eco316 michelle jacksondocx eco 316 effects of the federal reserves monetary policy on the financial institutions and markets financial institutions and markets eco 316 in this fi
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ECO 316
Effects of the Federal Reserve’s Monetary Policy on the Financial Institutions and Markets
Financial Institutions and Markets (ECO 316)
In this final assignment, I will look at the effects that the Federal Reserve has on The US
economy and financial system. This is going to be an in-depth explanation to the traditional and
nontraditional monetary policy tools that are based around unemployment and inflation. The
intent of this essay is to provide details of the pros and cons of the federal reserves use of
expansionary or contractionary monetary policy strategies. We will look at how this affects an
corrects recessions, depressions, and economic growth. I will examine how the institution or
intermediary of my choosing has Navigated these monetary policy changes during the past five
years. This essay will also take into account how my institution responds to change in the
federal reserves monetary policy. This will also highlight how the federal reserve's monetary
policy affects my intermediary in the financial markets.
This assignment describes what could be improved with the federal reserve's monetary policy in
the next six months based on the current financial
market. In this paper I will cover the following topics:
1.What makes the Federal Reserve implement expansionary policy or contractionary
policy? 2.How does expansionary policy or contractionary policy affect financial
institutions and intermediaries?
3. How does your financial institution and intermediary react to monetary policy changes?
What I found in my research is that “In the short run, monetary policy influences inflation and
the economy wide demand for goods and services—
, and, therefore, the demand for the employees who produce those goods and services—primarily
through its influence on the financial conditions facing households and firms” (How does
monetary policy influence inflation and employment? 2015). The Federal Reserve Affects
economic markets outlooks and financial markets by altering the federal funds rate. The federal
funds rate is an amount that financial institutions bill one another for short-term cash advances.
All these advances affect lending prices for large medium
and small businesses and the consumers that purchase from them. There are measures taken in
tactical advances as well as an effect on long-term
interest rates that make up the corporate bond rates and mortgage rates. Some of these variables
in the federal funds rate affect the foreign currency exchange price of the dollar index. These
changes in the economy disrupt The US and in advertently involve expansion and
unemployment. A simple example of this is when interest rates decrease companies and
families payless to borrow cash. These consumers purchase more goods and services, and
establishments get loans to increase the revenue of their businesses. When customers purchase
additional goods and services, firms employ new hires to be able to keep up with the demand of
their product. This influences the unemployment rate directly. It is somewhat difficult to
measure the effectiveness of the current monetary policy on the United States economy and the
world economy. The effects of changing the monetary policy are not seen instantaneously.
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