The Federal Reserve's Open Market Committee has decided that the federal funds rate should be 2 percent rather than the current rate of 1.5 percent. The appropriate open market action is to sell Treasury bills to decrease money demand.
What is Primary Goal of Federal Reserve?
- Through the application of monetary policy, the federal reserve's main objective is to foster economic stability.
- The degree of economic activity in the nation is influenced by monetary policy, which the federal reserve also utilises to keep prices stable. To accomplish these objectives, the federal reserve employs a range of instruments, such as interest rate setting, money supply control, and open market activities.
- It is the responsibility of the Federal Reserve to support a robust and effective American economy. Congress mandates the Federal Reserve to pursue maximum employment, price stability, and moderate long-term interest rates while continuing to be accommodative.
- The degree of employment or unemployment that the economy can sustain while keeping inflation low is known as the maximum employment level.
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