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In: Economics

ii. Analyze new monetary policy actions undertaken by the U.S. government throughout the time period by...

ii. Analyze new monetary policy actions undertaken by the U.S. government throughout the time period by describing their intended effects, using macroeconomic principles to explain the actions for 2000-2010.

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Answer:

Monetary policy is a macroeconomic policy undertaken by a government . This mainly includes management of money supply and interest rate . This policy is used by countries in order to attain macroeconomic objectives like inflation,consumption,liquidity and growth .
In US federal reserve is in charge of taking new monetary policies .
The federal reserves 3 instruments of monetary policy are open market operations,discount rate,and reserve requirements
OPEN MARKET OPERATIONS:This is used to influence the supply of bank reserves . This carried out by Domestic Trading Desk of the Federal Reserve Bank of New York under the guidance of FOMC . If Fed wants to increase the reserve,it will buy the securities and pay them by depositing in to the account, which is maintained at Fed by primary Dealer's Bank . If it wants to decrease the reserve,it will sell the securities and collects from those accounts .
Discount rate:This is the interest rate imposed by Fed on loans which are given for short term period to deposited institutions .
Reserve Requirements:These are a portion of bank's deposit ,which should be maintained in their vaults or on deposit at a Federal Reserve Bank

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