This paper will address the tools used by the Federal Reserve Board of Governors to control the money supply, the control of bank reserves, and interest rates and how these tools are used to influence the money supply and the macroeconomic factors.
According to McConnell and Brue, p. The US has implemented managed care and its presence created more effective channeling for consumer demand i. The action of this policy not only affects interest rates but ultimately the GDP, inflation, and the unemployment rate.
On the surface it may seem simple, it appears the Fed is trying to use the money supply as a lever to keep the economy on the right track without de-railing it. Principles, Problems and Policies, Retrieved March 21,from: The steel industry also continues to face economic stress.
If dollar becomes weaker, GDP growth suffers, as revenues earned from exports are not adequate which can have a profound impact on profits of business corporations in the country.
Monetary policy attempts to achieve vast economic goals by regulating the supply of money through influencing outcomes like economic growth, inflation, and unemployment. The government literally puts more money into the hands of consumers to encourage them to spend more which might result in higher production.
The economic tool to turn this around would be to decrease steel supply to drive up demand. This paper will identify and analyze the tools used by the Federal Reserve to control monetary policy, and how this, in turn influences the US economy and money supply.
They also increase or decrease the checking deposit component of the money supply through lending.
This contributes to increasing healthcare costs which affect the consumer price index measure of a change in the cost of basic goods or services. Best practices included putting a surcharge on steel, collecting the money when the steel was delivered and renegotiating some contracts to raise rates offsetting steel costs.
Striking the right balance between the two is very critical. Science Matters is published weekly in newspapers across Canada. The three main tools of the Federal Reserve to influence money supply can also be offset by one remaining factor not controlled by the Federal Reserve.
Compound this with the effects of domestic policies and international happenings, and you have an unpredictable macro-economic system. Retrieved March 21, from http: The opposite is also true, the money supply in the system will be decreased if the Required Reserve Ratio is increased.
Retrieved March 21, from http: In the United States, for example, we noticed that government reduced interest rates 11 times after September 11, to increase consumer spending and raise borrowing activity Berry, By reducing unemployment, people are producing goods and services.
Higher medicine expenses, an aging population that is living longer, and the additional use of costly technology contribute to increasing healthcare costs.
Get Access Macroeconomic Impact on Business Operations Essay Sample This paper will address the how the monetary policy has an impact on the factors of macroeconomics, such as gross domestic product GDPinterest rates, inflation, and unemployment.
Principles, Problems and Policies, Retrieved March 21,from:Macroeconomic Impact on Business Operations Essay Sample.
Macroeconomics explores trends in the national economy as a whole considering the study of the sum of individual economic factors. Essay on Macroeconomic Impact on Business Operations - Macroeconomic Impact on Business Operations Money supply is the availability of money in the hands of the public (economy) that can be used to purchase goods, services and securities.
View this term paper on Macroeconomic Impact on Business Operations. Monetary and fiscal tools are used by the government to control economic conditions in the Term Paper Macroeconomic Impact on Business Operations and 90,+ more term papers written by professionals and your peers.
Macroeconomic Impact on Business Operations Introduction One of the policies the United States government has to control the supply of money is the monetary policy. This policy recommended to the president of the United States by the Federal Reserve Board by.
Macroeconomic Impact on PAGE * MERGEFORMAT 9 Running head: MACROECONOMIC IMPACT ON BUSINESS OPERATIONS Macroeconomic Impact on Business Operations University of Phoenix This paper will address the how the monetary policy has an impact on the factors of macroeconomics, such as gross domestic product (GDP), interest rates, inflation, and.
Essay on Macroeconomic Impact on Business Operations - Macroeconomic Impact on Business Operations Money supply is the availability of money in the hands of the public (economy) that can be used to purchase goods, services and securities.Download