Eco_212_Week_5

Week 5 final paper Eco/212 Rex Hammond Dr. T o Define the purpose and function of money- the purpose of money is to sustain the balance and empower the elite. It shows that there can be success and improvement in the economy. With money being the currency that the United States uses, it makes the trading easy and manageable. Currency is used in many ways: Trading, paying off, and buying. Money has changed very much over the years and the fundamentals of how currency is used in everyday life. o Explain how the central bank manages a nation’s monetary system.- Banks manage the monetary system Constantly, and perform the job as best as can. o List at least one policy action that the Federal Reserve has taken to confirm that direction.- One of the policies that the Federal Reserve has is to maintain a target range for the federal funds. It is expected for it to happen in 2010 in order to promote economic recovery and price stability. With the dates of the policy to kick in, it is just keeping the order. o Explain the effects of monetary policies on the economy’s production and employment.- With the monetary policies in place ,the economy has a change that the economy’s productions and employment numbers may feel. Production should increase in many areas of the economy because the policy has goals to only improve. With employment, the policy opens up opportunities because it stables the prices and keeps low unemployment. Changes that can happen is positive because a low unemployment established by a monetary policy is a great move towards success. If a monetary policy goes wrong then as figured, unemployment would rise and the production would lesson. Reference (2010) Board of Governors, http://www.federalreserve.gov/monetarypolicy/mpr_default.htm