Question

GENERAL BUSINESS COURSE QUESTION:

Joe and Jill were talking about the role played by the Federal Reserve System in the United States. Joe seemed to be quite well informed about the functions and activities of our central bank. "You see, Jill, the Fed is the main guardian of our nation's economic stability," Joe declared. "In America, we don't want inflation and we don't want recession. To stretch the situation just a bit, we are frightened, absolutely terrified, by thoughts of hyperinflation and depression. So, the Fed maintains the right to alter the situation and protect us from these two monsters. And you ask, how they do that? The answer is the discount rate. That is the device that the Federal Reserve System uses to keep us safe."

Jill was enjoying listening to her friend explain it all. Joe continued, "Now the discount rate is the interest rate that the twelve Federal Reserve Banks around the country charge their member banks on a loan. So, when the discount rate goes up, all interest rates tend to go up. And, happy to say, when interest rates go up all over America, this tends to slow down any inflationary tendencies." Jill asked, "Does the Fed have other tools for stopping inflation?" "No," said Joe.

7) Has the economy recovered from the last recession? What factors led you to your answer? You should be able to back up your opinion. Don't use blog opinions. Make sure your source(s) is/are based upon facts.

Answer 1

To be honest, Yes, the USA has recovered from the last recession in many ways. It was in 2007 Dec the last recession popped up in the US economy and it ended in June 2009. But to recover the recession it nearly took decades for the US economy. Even though the recovery has made by the US government, it still left some scars in many areas where the common people still suffer.

What leads the recession is the loss of more than 8 million jobs, half the value of DOW, and S&P 500 along with triple dollar in retirement accounts.

The 3 acts of congress signed by the two successive presidents between 2008-10 put an end to the great recession of the USA.

1. The Troubled Asset Relief Program of 2008 ;

a) Loan tightening eased

b) Interest rates ease

2. The American Recovery and Reinvestment Act of 2009

a) Increase in business investment

b) increased bank loan availability

c) Customer expenditure increased.

d) Money flow was brought back.

3. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

a) Employment made available

b) Industrial production turned around with infrastructure spending

c) Fall of Household debt burdens