The Federal Reserve

"The Federal Reserve System" Please respond to the following:

Analyze the structure of the Federal Reserve Banks and Board of Governors, and make at least one recommendation for improvement. Explain your rationale.

Choose a position to defend:

“The U.S. Congress and the President should have enough leverage and power to control the Federal Reserve’s actions in both the short and long run.”

“The Federal Reserve should be independent from political pressure in designing and implementing monetary policy.”

There are too many people involved with the decision making. Such important decisions involving the nation’s overall economy, this should not be taken lightly. I think there are too many opinions in on these decisions. I feel as if one Board of Governor member should be elected to solely make these decisions only with the support of the remainder of the board. I do not believe the president is capable at being successful with making the financial decisions for the country when there are so many other issues their focus should be on. The financial stance of this economy is very important and I feel should be the responsibility of someone more qualified.

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"Monetary Control" Please respond to the following:

Create an analogy or metaphor that explains how banks create and destroy money – one that would be understood by someone with absolutely no background in economics.

Discuss how the U.S. Treasury’s decisions influence the Fed’s daily open-market operations.

Banks create and destroy money by sending it through a cycle between banks once the money has been completely through the cycle it is destroyed.

When the U.S. Treasury moves money in and out of banks it affects the day to day open-market operations. The open-market transactions are dependent upon these daily flows of money.