Question

If you can help with any of the following questions it would be much appreciated !!! Describe the Federal Reserve in terms of power and accountability. Describe the organization of the Fed and how members are chosen, Who appoints them? What can they do? What powers does the Fed have and to whom are they accountable? Explain how the main tools of monetary policy are conducted.

Answer 1

Answer) I will break my answer in the following parts as asked in the question

1. Power and accountability in Federal reserve/What powers does Fed have and their accountability
2. Organization of Fed,selection of its members and who appoints them
3. What is the work of Fed members
4. How main tools of monetary policy are used

1. Power and accountability in Federal reserve/What powers does Fed have and their accountability-It will be no exaggeration if we say that Federal reserve is key player for keeping health of an economy good,its powers include keeping a check on financial institutions,coming up with monetary policies which could decide a lot of things ranging from inflation to your loan rates,deciding economic course of action in times of crisis and being an economic advisor to Government.Federal reserve is accountable to Congress and thus in turn accountable to the public.

2. Organization of Fed,selection of its members and who appoints them-Federal reserve has 5 parts in its organization starting with board of governors,followed by federal open market committee,reserve banks,other banks and finally advisary councils,members of fed is nominated by President of US and congress approves it,its members are selected therefore by President,approved by Congress.

3.What is the work of Fed members-Work of Fed members inludes regulating financial institutions,keeping intact health of economy through various tools at disposals,act as a line of defence during crisis,maintain stability in volatile environments,regulate money supply through its tools and coordinating with banks and other financial institutions.

4.How main tools of monetary policy are used-Monetary policy tools are used based on situation prevailing in the market,for example if growth is not there,fed can decrease interest rates,also it can use its powers to decrease reserve requirements which again helps in more spending power,another tool which has an example in form of troubled asset relief program(TARP was used in 2008 crisis by Fed to buy toxic assets and inject money in the system) is market operations wherein it buys bonds/assets and inject money,so these tools are used when Fed wants to give a certain direction to the economy or country is facing an economic crisis.

Answer is complete.Thank you!