POL_SC 1100 Lecture : Domestic Policy .docx
3 Mar 2014
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Regulation of the economy: fiscal policy, deals with government policy (taxing and spending, congress and the president make these decisions, the government stimulates the economy, monetary policy, deals with the supply of money available in the economy, the federal reserve makes monetary policy, 12 member banks in the federal reserve system, members of the board are appointed by the president, serve 14 year teams, the federal reserve chair: ben bernanke, 4 year terms, no term limits. 2: adjust interest rates, when they lower the rates, when they raise the rates, they"re trying to get people to put more money into the economy, people are less likely to put money in, so they are slowing the economy down, buys and sells bonds, treasury bills, etc, puts money into the economy, the reserve rate, banks have to have a certain amount of actual cash on hand, decreasing the reserve requirement gives banks more money to loan c.
