In: Economics
I need someone to describe these topics to me as the web makes it confusing. Thank you.
Money and financial banking.
Monetary policy.
The federal reserve.
Functions of the federal reserve.
Financial banking: bank is a pace which provide the financial service to customers i.e the services which are related to money like giving credit to customers on interest,providing insurance, investment management services,stock broking services etc.
opening a firm needs large capital which is acquired by getting finance(money) from the bank
insuring that customer gets the money in urgency is known as insurance.health insurance,motor vehicle insurance,life insurance are some types of insurance.
when someone is having lumpsom amount of money.,he approaches the investment manager who invest his money in different types of financial assets like stock,mutual fund etc.
Monetary policy : policy created by the Apex bank/central bank of a country to control the activities related to money/finance is known as Monetary policy.
following activities are included in monetary policy
stabalizing inflation and unemployment by reducing/increasing the interest rate.
stability of GDP
maintaining exchange currency rate.
Expansionary monetary policy: increasing the flow of money in an economy by reducing the interest rate leads to reduction in unemployment and recession as well as boost short term growth cused by increase in growth in aggregate demand.reducing the exchange rateof tge money so as to increase the investment iby foreign economy us also an measure in expansionary monetary policy.
Contradictionary monetary policy:shrinking the flow of money by increasing the interest rate on borrowing so as to decrease the inflation is an contradictionary monetary policy.
Federal reserve bank: Federal reserve is an apexbank/central bank of UNITED STATES. it is the governing authority entitled to make the monetary policy.
Jerome .H.powell is chairman of this bank established in December 23,1993.
Functions of Federal reserve : federal reserve perform five general function to promote effective operation of U.S economy.