The Function of the Federal Reserve System in the US Economy

When countries issue currency, especially fiat currency that is not specifically backed by any commodity, it is necessary to have a central bank whose job it is to monitor and regulate the supply, distribution, and transacting of currency. In the United States, the central bank is called the Federal Reserve. The Federal Reserve currently consists of the Federal Reserve Board in Washington, D.C., and twelve regional Federal Reserve banks located in Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, San Francisco, and St. Louis. Created in 1913, the history of the Federal Reserve represents the federal government’s   ongoing effort to achieve the goals of any central banking system — ensure a secure American financial system by maintaining a stable currency backed by the benefits of high employment and minimal inflation.   Brief History of the Federal Reserve System The Federal Reserve was created on December 23, 1913, with the enactment of the Federal Reserve Act. In crafting the landmark legislation, Congress was responding to a series of economic panics, bank failures, and credit scarcity that had plagued the nation for decades. When President Woodrow Wilson signed the Federal Reserve Act into law on December 23, 1913, it stood as a classic example of an all-too-rare politically bipartisan compromise balancing the need for a consistently regulated centralized national banking system with the competing interests of established private banks backed by a strong â€Å"will of the people† populist sentiment. Over the more than 100 years since its creation, responding to economic disasters, such as the Great Depression in the 1930s and the Great Recession during the 2000s, have required the Federal Reserve to expand its roles and responsibilities. The Federal Reserve and the Great Depression As U.S. Representative Carter Glass had warned, years of speculative investments led to the disastrous â€Å"Black Thursday† stock market crash of October 29, 1929. By 1933, the resulting Great Depression had resulted in the failure of nearly 10,000 banks, leading newly inaugurated President Franklin D. Roosevelt to declare a banking holiday. Many people blamed the crash on the Federal Reserve’s failure to stop the speculative lending practices quickly enough and for its lack of an in-depth understanding of monetary economics necessary to implement regulations that might have lessened the devastating poverty resulting from the Great Depression.  Ã‚   In response to the Great Depression, Congress passed the Banking Act of 1933, better known as the Glass-Steagall Act. The Act separated commercial from investment banking and required collateral in the form of government securities for Federal Reserve notes. In addition, Glass-Steagall required the Federal Reserve to examine and certify all banking and financial holding companies. In a final financial reform, President Roosevelt effectively ended the long-standing practice of backing U.S. currency by physical precious metals by recalling all gold and paper silver certificates, effectively ending the gold standard. Over the years since the Great Depression, the duties of the Federal Reserve expanded significantly. Today, its responsibilities include supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions. How Does the Federal Reserve System Work? The Federal Reserve system is overseen by a seven-member board of governors, with one member of this committee chosen as the chairman (commonly known as the Chairman of the Fed). The president of the United States is responsible for appointing Fed chairmen to four-year terms (with confirmation from the Senate), and the current Fed chair is Janet Yellen. (The regular members of the board of governors serve fourteen-year terms.) The presidents of the regional banks are appointed by each individual branchs board of directors. The Federal Reserve system serves a number of functions, which generally fall into a couple of categories: first, it is the Feds job to ensure that the banking system stays responsible and solvent. While this does sometimes mean that the Fed has to work with the three branches of government to think about explicit legislation and regulation, it more often means that the Fed works in a transactional sense to clear checks and to act as a lender to banks that want to borrow money themselves. (The Fed does this mainly to keep the system stable and is referred to as the lender of last resort, since the process is not really encouraged.) The other function of the Federal Reserve system is to control the money supply. The Federal Reserve can control the amount of money (highly liquid assets such as currency and checking deposits) in a number of ways. The most common way is to increase and decrease the amount of money in the economy via open-market operations. Open-Market Operations Open-market operations simply refer to the process of the Federal Reserve buying and selling U.S. government bonds. When the Federal Reserve wants to increase the money supply, it simply purchases government bonds from the public. This works to increase the money supply because, as the buyer of the bonds, the Federal Reserve is giving out dollars to the public. The Federal Reserve also keeps government bonds in its portfolio and sells them when it wants to decrease the money supply. Selling decreases the money supply because the buyers of the bonds give currency to the Federal Reserve, which takes that cash out of the hands of the public. There are two important things to note about open-market operations: first, the Fed itself isnt directly responsible for printing money. Printing money is handled by the Treasury, and there are multiple channels by which the money gets into circulation. (Sometimes, for example, the new money just replaces worn-out currency.) Second, the Federal Reserve doesnt actually create or issue the government bonds, it just handles them in secondary markets. (Technically, open-market operations could be conducted with a number of different assets, but it makes sense for the government to manipulate the supply and demand of an asset that was issued by the government itself.) Other Monetary Policy Tools Although not used nearly as frequently as open-market operations, there are other tools that the Federal Reserve can use to change the amount of money in the economy. One option is to change the reserve requirement for banks. Banks create money in an economy when they loan out customers deposits (since both the deposit and the loan count as money), and the reserve requirement is the percentage of deposits that banks have to keep on hand rather than lending out. An increase in the reserve requirement, therefore, restricts the amount that banks can lend out and thus reduces the money supply. Conversely, a decrease in the reserve requirement increases the number of loans that banks can make and increases the money supply. (This, of course, assumes that banks want to lend more when they are allowed to do so.) The Federal Reserve can also change the money supply by changing the interest rate that it charges banks when it acts as the lender of last resort. The process by which banks borrow from the Federal Reserve is called the discount window, and the interest rate that the Federal Reserve charges is called the discount rate. When the discount rate is increased, it is more expensive for banks to borrow in order to cover their reserve requirements. Therefore, a higher discount rate causes banks to be more careful about reserves and make fewer loans, which reduces the money supply. On the other hand, lowering the discount rate makes it cheaper for banks to rely on borrowing from the Federal Reserve and increases the number of loans they are willing to make, thus increasing the money supply. Decisions regarding monetary policy are handled by the Federal Open Market Committee, which meets approximately every six weeks in Washington in order to discuss changing the money supply and other economic issues. Updated by Robert Longley

Gay Marriage Should Be Legal - 1169 Words

Gay marriage should be legalized. Our civil rights and the Constitution give us many liberties. One of our civil liberties is the pursuit of happiness, which homosexual people are not allowed to chase. They cannot be married to the person they love and it violates their freedoms. According to professorshouse.com, â€Å"In Alaska, Nevada, Montana, Oregon, Utah, Nebraska, Missouri, Michigan, North Dakota, Ohio, Kentucky, Oklahoma, Kansas, Louisiana, Arkansas, Georgia, Mississippi, Texas, and Alabama, not only is gay marriage banned, but so are civil partnerships.† The 1st amendment of the Constitution states that a person’s religious beliefs or a lack of thereof must be protected. Legislatures also cannot discriminate against marriages of the†¦show more content†¦Since gay marriage is not legal, said person’s spouse is not recognized as their next of kin and care is delayed. Who would be affected if homosexual marriage was legalized? No one. Everyone believes there is one person who is out there to love us. Gay people feel the same way. Parenthood is a benefit of marriage and gay couples cannot have children by themselves, without some type of help, so they look to adoption agencies. In some cases gay couples are put on longer waiting lists or denied completely. There are other benefits to being married as well, such as tax breaks. On the website professorshouse.com it reads, â€Å"When we hit our mid-thirties, we wanted only true friendships- friendships that were durable.† This is a perfect example of matrimony and what it should be based on. . According to dictionary.com a marriage is, â€Å"The legal or religious ceremony that formalizes the decision of two people to live as a married couple, including the accompanying social festivities.† If this is a marriage why are gay people not included in this? Even though gay marriage should be legalized, some people have different beliefs. In most religions including, Christianity, Islam, and Orthodox Judaism same sex preferences are a sin. People believe in procreation to repopulate the world, but are against gay marriage and homosexuals adopting children because they cannot procreate on their own. If this is aShow MoreRelatedGay Marriage Should Be Legal1205 Words   |  5 PagesHoward Sociology 1301-93431 Gay Marriage Getting married is something that most people do when they find love, which it is an important event in their life. The GLBT (gay, lesbian, bisexual and transgender) community now get the legal right of same-sex marriage, which they have fought for throughout the years; on the other hand, some opponents of same-sex marriage have called for a constitutional change towards it. Although there were some countries that allowed gay marriage before the United StatesRead MoreGay Marriage Should Be Legal1159 Words   |  5 PagesAmendment, which puts a ban on gay marriage. This amendment entitles to equal rights to the gay community, ending toleration of discrimination in jobs, rights protecting gays from hate crimes,rights allowing advancement in government. However, the concept of gay marriage is still not considered a right the American people should extend to homosexuals. II. The vast majority of opponents believe marriage should be between one woman and one man, meaning marriage should be between members of the oppositeRead MoreGay Marriage Should Be Legal1574 Words   |  7 Pagesequal rights. Gays and lesbians are consistently denied rights that are typically taken for granted by the average American. Specifically, gay and lesbian couples are denied the right to marry even if they are outstanding citizens. They are held at an unfair disadvantage solely because of their sexual orientation. This discrimination must stop, because gay and lesbian couples are law-abiding citizens too, who should be afforded the same rights as heterosexual couples. Marriage is about love andRead MoreGay Marriage Should Be Legal1564 Words   |  7 PagesWhat is marriage? Recently, people argue with respect to the definition of marriage. What happened to marriage? To get married is a very important event for almost everyone. Especially for women, marriage and giv ing a birth could be the two biggest events of their lives. Many people believe that getting married to the one whom he or she loves is natural. However, what do you think if you cannot get married to him or her because it is socially unacceptable? 100 years ago different colored peopleRead MoreShould Gay Marriage Be Legal?778 Words   |  3 PagesShould Gay Marriage Be Legal? â€Å"†¦I now pronounce you husband and wife†¦Ã¢â‚¬  One would normally hear this when attending a wedding. In tradition marriage has been between one male and one female who love each other. But how would one feel if they heard â€Å"I now pronounce you groom and groom† or how about â€Å"†¦bride and bride...†? In the last 50 years the number of same-sex couples has increased. The on-going argument between the government and the people is â€Å"Should gay marriage be legal?† Although some sayRead MoreGay Marriage Should Be Legal1126 Words   |  5 PagesJune 26, 2015 for gay marriage to be legal in all fifty states, thirty seven out of the fifty and Washington D.C already legalized gay marriage. Many support gay marriage and many do not, with widespread values and reasons for and against it. Due to religion and rights people across the nation have differing views and opinions of it.In a five to four vote in the Supreme Court gay marriage becam e legalized in all fifty states. Shortly after that a few marriage officiators and marriage licenses peopleRead MoreGay Marriage Should Be Legal1179 Words   |  5 PagesGAY MARRIAGES Some states such as Iowa legalized gay marriage through the action of judicial interpretation based on the state’s constitutional stipulations while other states such as Vermont legalized gay marriage through legislation initiatives. These cases demonstrate the government is the sole body that can dictate the validity of whatever is to be regarded as a marriage, and in this case gay marriage. The power to validate marriage is still observed among the private citizens, religious institutionsRead MoreThe Gay Marriage Should Be Legal947 Words   |  4 PagesDefending Gay Marriage During the last few years, homosexuality has become an important issue for debate. Moreover, homosexuals have taken their case further by claiming their right to marry. Same-sex marriage, usually known as â€Å"gay marriage†, is the marriage between two people from the same biological sex (Doskow1). Since 2000, eleven countries have approved the legalization of gay marriage worldwide: Netherlands, Belgium, Spain, Canada, South Africa, Norway, Sweden, Portugal, Iceland, ArgentinaRead MoreGay Marriage Should Be Legal1480 Words   |  6 PagesNew World Dictionary defines the word married as being husband and wife, yet there are millions of gay activists who are fighting for a new meaning. They believe marriage is more than a piece of paper and a set of rings. The hope is that marriage could be defined as a â€Å"public recognition of a private commitment† or â€Å"emotional, financial, and psychological bond† between two people (Sullivan 53). Gay activists belie ve that taking away the ability to have a publicly recognized relationship or an acceptedRead MoreGay Marriage Should Be Legal1351 Words   |  6 Pageshappened for United States, gay marriage became legal in all 50 states. In most states it already was but the remaining 13 became legal this year. There are many concerns regarding gay marriage, and the effects of them involve many legislative, cultural, religious and family issues. Gay marriage is controversial because a lot of people do not approve of it, they think it is immoral, unnatural, and not what the traditional concept of â€Å"marriage† really means. Opponents of gay marriage say it is only meant

Heaven Is for Real Book Review - 2042 Words

Heaven is for Real I) The Title of this literature is â€Å"Heaven is for real† and the author is Todd Burpo with Lynn Vincent. II) The Brupo family lives in Imperial, Nebraska. Sonja and Todd Burpo are the parents of four wonderful children. Cassie, Colton, Colby, and one daughter that passed away due to maternal complications, are the children of Sonja and Todd Burpo. While on vacation during 2003, The Burpos family visited Denver Butterfly Pavilion. It was to celebrate Todd’s recovery from a shattered leg, kidney stones, and hyperplasia (a lump in his chest). Colton falls ill to feverish symptoms and what appeared to be a â€Å"stomach virus† (uncontrollable vomiting), so the fun ended early for the Burpo family. When he is transferred to†¦show more content†¦Colton shows this to his Daddy through physical demonstration. Colton also explains to his Dad that â€Å"Everybody has wings† in Heaven. Everybody but Jesus has wings, so when the angels are flying, Jesus is ascending. Another one of Colton’s experiences is when he met Pop, his Great Grandfather. His father finds this out because Colton asked whether if Pop was his mom’s father or his dad’s father. However, when Todd showed Colton a picture of Pop when he was old Colton had responded by being unfamiliar with the picture. He told his father that â€Å"nobody is old in heaven†¦and nobody wears glasses.† When Todd showed him a picture of Pop when he was younger and without glasses though Colton recognized him. When Colton went to Heaven, he also met his baby sister. Colton described her as being small and having dark hair like her mom. Colton said that his sister wanted everyone to know that she was okay and she was doing well, â€Å"Jesus adopted her.† This was significant for Colton’s mother because it helped her defeat her guilt for having a miscarriage and it helped her to start healing. VI) Jesus said, â€Å"unless y ou change and become like little children, you will never enter the kingdom of heaven.† I agree with this quote because it describes children as being pure. Children are honest, humble, and they live life happily doing the things they love. These attributes are â€Å"hard-wired† into children; you can’t get them to change. Children are able to accept reality and to acceptShow MoreRelatedAnalysis Of The Book Heaven Is For Real 1703 Words   |  7 PagesBook Review of Heaven is for Real Daddy, you know I almost died. When I was screaming for you after surgery, that s because I just came back from Heaven (Burpo 44). Imagine hearing this from your four-year-old son after an emergency surgery where doctors said he may not survive. When Colton Burpo was four-years-old he had a ruptured appendix and had to go into surgery leaving his parents in tears wondering if he was going to survive. Together with Colton s father and author, Todd Burpo, weRead More Comparing Black Elk Speaks and The Lone Ranger and Tonto Fist Fight in Heaven1679 Words   |  7 PagesComparing Black Elk Speaks and The Lone Ranger and Tonto FistFight in Heaven      Ã‚  Ã‚  Ã‚   Traditionally, Native American Literature has been an oral genre. Although Native American Literature was the first American literature created, it has been the last to be recognized -and, to some extent, is still waiting for full recognition (www.usc.edu). With the Indian being forced to assimilate, their literature was forced to take on a written form. Although the traditional way of storytelling has changedRead MoreThere s No Heaven By Salman Rushdie930 Words   |  4 Pagesescalating in severity as more and more instances of terrorism are associated with radical religious groups. As a result, many tend to share many of the same feelings as those expressed by author Salman Rushdie in his article Imagine There s No Heaven. 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The author tells the story of the real conflict faced by miners through the eyes of four main characters, each from different walks of life, with their own different point of view. The story told about the real life hardshipRead MoreThe Revelation Of Jesus Christ1238 Words   |  5 Pagesmankind but in Him was God . The reason was to free us from our sins and as a result, He depicts Himself of our true nature as human beings. He was trying to bring us close to God such that whoever surpasses the test, automatically enj oy the kingdom of heaven but only through Him. His name and symbolism were a way of being our anointed Savior from the triangles of the sinful world . Catechism of the Catholic Church is a procedural format that an individual or group passes through in the church system toRead MoreBook Review : Counter Culture By David Platt Essay977 Words   |  4 PagesBook Review of Counter Culture by David Platt Imagine a world where people are living for themselves. 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My Last Name Starts With A G So I Have Essay Example For Students

My Last Name Starts With A G So I Have Essay My last name starts with a GAG 1 have the following topics Discuss the pros and cons of two-way immersion programs. Children who introduced to immersion programs at an early age learn how to speak in a new language learn it fluently without accent. These children also have been seen to be more thoughtful about problem solving and decision making. Discuss the pros and cons of transitional bilingual education programs. Bilingual education programs are very costly. Bilingual education programs allow minority language speakers to avoid the dominant language. Compare and contrast two-way immersion program and transitional bilingual education programs. Both programs would be beneficial because both programs promote learning different languages. However the Immersion program would be best because it would not give room for the student to overlook the desired language to be learned. Which one do you think is more effective for the student you created a refill for in Weeks One and Two? Why? I think the Immersion program would be best for Lilly because it would not allow her to fall back to mainly Chinese. With the Bilingual programs Lilly would he tempted to use the language that comes easiest to her rather than learning to speak English and conquering the challenges she is having with the new language.