Question

Topic: The Federal Reserve Act and the Humphrey-Hawkins Full Employment and Balanced Growth Act.

A) Identify the objectives of each of these actions, and evaluate the nature of these mandates.

B) Explain the importance of historical events in determining the composition of these mandates, and their role in fostering a stable business environment.

C) Evaluate the implications on business practice and on the general business climate that you understand to be the likely result of one or both of these acts.

Answer 1

A) Employment and Balanced Growth Act of 1978 is an amendment to the Employment Act of 1946 came into being in October 27, 1978, by President Jimmy Carter, establishing new goals for the nation’s economy.Then Senator Muriel Humphrey gives President Carter her hands to shake after Carter signed the Humphrey-Hawkins Bill into law. Representative Augustus Hawkins, co-sponsor of the bill, is portrayed next to her
Senator Muriel Humphrey shakes hands with President Jimmy Carter after the signing of the Humphrey-Hawkins Act
The Employment Act stated that it is the responsibility of the federal government to createcircumstances under which there will be afforded useful employment for those able, willing, and seeking work, and to promote maximum employment and production . Federal reserves act The 1913 Federal Reserve Act is U.S. legislation led to the creation of the current Federal Reserve System. Congress developed the Federal Reserve Act to ensure economic stability in the United States.This law sets out the purpose, structure, and function of the Federal Reserve System. Congress can amend the Federal Reserve Act and has done it several times.It is perhaps one of the most influential laws concerning the U.S. financial system.

Before this 1913 episode, financial panics were common occurrences because investors were uncertain of the safety of their bank deposits. Private financiers such as J.P. Morgan, who bailed out the federal government in 1895, often advanced lines of credit to provide stability in the financial sector. Federal Reserve Act, signed into law by President Woodrow Wilson, gave the 12 Federal Reserve banks the right to print money to ensure economic stability. This Reserve System created the dual mandate to maximize employment and keep inflation low.
The 12 Federal Reserve banks, each in charge of regional districts are in Boston, New York, Philadelphia, Cleveland, Richmond, St. Louis, Atlanta, Chicago, Minneapolis etc . A governor nominated by the president and approved by the U.S. Senate governs each regional bank and together, they make up the Board of Governors. B ).

Attempts to reform currency and banking had been made in the United States . The first major form of this type of legislation came up through the First Bank of the United States in 1791. Championed by Alexander Hamilton .         Attempts were made to extend this bank’s charter and coverage but they failed before the charters expiration in 1811. This led to the creation of the Second Bank of the United States. In 1816, the U.S. Congress chartered this Second bank for a twenty-year period to create irredeemable currency with which to pay for the costs of the War of 1812. It opened the door to the possibility of taxation by inflation. After Panics of 1907, there was general agreement among leaders in both parties of the necessity to create some sort of central banking system to drive the economy during financial emergencies. Republican Senator Nelson Aldrich coined the idea of a National Monetary CommissionFinaly , Democratic Congressman Carter Glass and Senator Robert L. Owen crafted a compromise plan in which private banks would control twelve regional Federal Reserve Banks. There comes Fed .   

Employment and balanced growth act was a response to rising unemployment levels in the 1970s. It also underlined the failure of 1946 act . C ) Fed had brought stability to the economy , even though it's policies were criticised during the recession , as an agency to monitor currency printing , it help america to stay safe in banking panics of the early 20s .

Balanced growth act Instruct ed the government to establish a balance of trade, i.e., to avoid trade surpluses or deficits.
It adviced the Board of Governors of the Federal Reserve to establish a monetary policy that maintains long-run growth, minimizes inflation, and ensures stability .
Instructed the Governors of the Federal Reserve to transmit a Monetary Policy Report to the Congress twice a year outlining its monetary policy.
It embarked the President to set numerical goals for the economy of the next fiscal year in the Economic Report of the President and to suggest policies that will achieve above said goals