ECON 2010 Chapter 12: Econ 2010 Chapter 12 Notes
Document Summary
Analysts attempt to forecast fed decisions about monetary policy: greenspan briefcase indicator, fed decisions have significant effects on financial markets and the macro economy. Monetary policy is a major stabilization tool: quickly decided and implemented, more flexible and responsive than fiscal policy. Responsibilities of the federal reserve: conduct monetary policy, oversee and regulate financial markets, central to solving financial crises. The federal reserve system began operations in 1914: does not attempt to maximize profit, promotes public goals such as economic growth, low inflation, and smoothly functioning financial markets, www. federalreserve. gov/ 12 federal reserve bank districts: assess economic conditions in their region, provide services to commercial banks in their region. Leadership is provided by the board of governors: seven governors are appointed by the president to 14-year terms, president selects one of the seven as chairman for a four-year term. The federal open market committee (fomc) reviews economic conditions and sets monetary policy: 12 members who meet eight times a year.
