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government, to the public, and to financial institutions (Federal Reserve Board, 2005). This paper will give some insight into the Federal Reserve System and its policies.
Federal Reserve Monetary Policy
The term "monetary policy" refers to the actions undertaken by the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals (Federal, 2007). The Federal Reserve influences money and credit conditions in the economy in pursuit of full employment and stable prices. The Federal Reserve uses open market operations, discount rate, and reserve requirements as the three tools to govern the monetary policy...
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