Federal Reserves

The Federal Reserve makes many decisions for the American economy in which may impact a negative or positive outcome. In this paper it will explain the function of money and how it has become a value and must for our population, central bank manages and how important the banks are for our nations, nation monetary system and outline the direction of monetary policy how this could affect the economy, production and employment.

The purpose and function of money is to have a value as a medium to evaluate a service or good. For example if you dine out he or she is paying for services and if he or she purchases soap that would be a good. Change society from an economic state of bartering, to monetary bills of value. For example in society if one has a million dollar house then they are considered milliners and if one rents in a low income area they are considered poor because of his or she value of life. Because the value of money can be set by our government as gold and market values items. Money also can be exchanged for goods, and services for the population needs and wants as mention above. The central bank manages the nation’s supply of money, credit and operates as the center of the nation’s financial system. Business move currency, coins and payments services moving as well as electronic funds transfers and check clearing processed by the bank. The central bank provides services to the federal government through the U.S Department of Treasury by supervising and regulating consumer’s protection laws. The central bank manages our nation’s monetary system by managing the flow of money and credit in the economy. The flow the money and credit contracts the spending and business activity, workers may lose jobs, recession. The Federal conducts monetary policy to balance and keep prices steady, workers employed and factories productive.