FEDERAL RESERVE CASE STUDY

Federal Reserve Case Study

Federal Reserve Case Study

Actions by the Federal Reserve have significant political and practical implications. The Fed has the ability to stimulate or restrain financial markets and broad economic activity by tightening or loosening the financial system with funds, by lowering or raising margin requirements, and by administratively changing other regulatory requirements. The Fed, through its FOMC actions on interest rates, has the ability to influence political activity regarding budget deficits, cumulative national debt, and tax policy. Changes in interest rates affect the rate of inflation, unemployment, and the flows of foreign investment. Changes in interest ...