Homework answers / question archive / Part 1: The Federal Reserve and central banking  Read the latest monetary policy (Links to an external site

Part 1: The Federal Reserve and central banking  Read the latest monetary policy (Links to an external site

Finance

Share With

Part 1: The Federal Reserve and central banking 

Read the latest monetary policy (Links to an external site.) reports released by the Federal Reserve on the Board of Governors’ website, and read The Role of the Federal Reserve as an International Lender of Last Resort during the 2007-2008 Financial Crisis article.

Appraise how the statement reflects the FOMC’s views on the economy and provides a justification for its monetary policy decisions.

Part 2: Quantative Easing

Opponents of quantitative easing see it as a new approach to monetary policy that risks significantly increasing inflation without effectively stimulating economic growth. Some of these opponents see the policy as monetizing the national debt. Supporters of quantitative easing argue that it is an extension of the traditional use of open market operations that the Fed routinely uses to stimulate the economy when it is perceived to be too weak. Select one of the quantitative easing arguments and support your position using specific examples.