Federal Reserve Paper

Federal Reserve Paper - The Federal Reserve 1 The Federal...

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                                                                The Federal Reserve 1 The Federal Reserve Paper University of Phoenix Dorica Irvin ECO/212 May 16, 2011 Instructor: Marina Bills
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                                                                The Federal Reserve 2 Central bank plays a major role as the nation’s money manager. Besides, it manages over the monetary policy and acts as a lender. The Federal Reserve has at least one policy is keeping the federal funds low and promoting a moderate economic growth. This paper will cover in detail the function and purpose of money, and the action that the effects Federal Reserve have taken on the production and employment. The Federal Reserve is responsible for controlling the money supply. The number one function of money is to facilitate the business of the market by acting as common medium of exchange. Money is accepted substance that serves three purposes of functions: it provides unit of account, store of value and standard of deferred payment. A unit of account is a standard numerical unit of measurement of the market value of goods, services, and other transactions. A store of value, money must be able to be reliably saved, stored, and retrieved – and be predictably usable as a medium of exchange when it is retrieved. A standard of deferred payment is an accepted way to settle a debt (Batson, 1981). Money is used to buy goods and service, especially across the world. Money is important in an economy, and makes trading easier between business and countries. The ultimate purpose of money is to make life better for everyone. Key functions of a Central Bank management of the monetary policy: issuance of
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This note was uploaded on 05/16/2011 for the course ECON 212 taught by Professor Steave during the Spring '10 term at University of Phoenix.

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Federal Reserve Paper - The Federal Reserve 1 The Federal...

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