Macroeconomic Impact on Business Operations Essay -- Economics Economy

The Federal Reserve is considered an independent central bank who is still held accountable to Congress. Monetary Policy is a tool that the government uses in order to influence the economy. The FOMC (Federal Open Market Committee) can affect monetary policy by using three tools. 1. Open Market Operation- the buying and selling of U.S. government securities 2. Altering reserve requirements- the amount of money banks must hold when its customers deposit monies. 3. Adjusting the discount rate- the interest rate charged to commercial banks. As of today the FOMC is changing interest rates to assist in inflation, intrest rates must change in order to make inflation better. A decision the FOMC makes for the good of our economy. Open Market is a way to influence the economy which is defined as the buying and selling of government securities. When the Federal Reserve feels the economy does not have enough money in the population they buy securities from members banks and increase the amount of money, if the Federal Reserve feels the economy has too much money in the population and want...