Question

• How does the Federal Reserve implement monetary policy and how does this implementation affect the economy? Do you believe that the Federal Reserve is still as efficient as it was when it was first created? Why or why not? Who is the Fed, are they elected, to whom are they responsible, given their expansive power.
• What economic policies (fiscal or monetary policy) might you recommend if you were Chief Economic Adviser of a poor, struggling country to try to attain growth and fight poverty? How would you promote GDP growth?

Answer 1

Answer:
1.)
Federal Reserve executes monetary policies by observing the expansion level within the economy at 2% and altering the rate of interest agreeing to that. For instance, on the off chance that the inflation rate is over 2%, it'll increment the interest rate in order to diminish the cash supply so that the inflation rate diminishes. Higher the money supply, higher is the inflation rate and vice versa. When the interest rates are expanded, stores within the managing an account framework increment and the merchandise turn cheaper which increments the obtaining control. At the same time, in case inflation rate is below 2%, the interest rates are decreased so that individuals contribute by looking for more credit, which impels the economy and increments the level of yield.

It still is beneath the control of the Government, indirectly, indeed in case not on paper. In terms of quantitative viewpoints such as controlling the level of inflation, it is still as productive and inventive, and more advanced. But in terms of choice making it hasn't accomplished independence indeed in spite of the fact that it claims to be an autonomous body as the president still weights how much the interest rates ought to be diminished by which decreases the effectiveness in terms of decision-making.
Fed is the central banking authority of the United States, and they are designated by the president and after that affirmed by the senate for a period of 14 years tenure. They are dependable for checking the banking framework of a nation, and they are dependable to the open in guaranteeing stable prices and greatest level of business.

2.)
In case I were the Chief Economic Advisor of a poor, struggling economy, I would diminish the level of interest rates so that firms and businesses borrow more at a cheap rate and contribute within the domestic economy. This will offer assistance, fight poverty as firms will utilize more number of individuals since of increment in investments and capital influx from overseas. In terms of fiscal arrangement, there might be expanded government consumption and less tax rates so that firms would spend more. This would impel development and advance GDP development as work openings would increment.

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