1. The Federal Reserve is responsible for managing the U.S. money supply.
a. List and thoroughly explain 5 of the functions of the Federal Reserve System. Be specific.
i. Use the slides, audio, and the Federal Reserve website for this.
b. Please thoroughly and completely explain how money is created and destroyed.
i. Please use the slides and audio for this.
c. Please thoroughly and completely explain how the Federal Reserve would use the 3 tools of monetary policy to address the problem of recession, including the impact of those tools on the key economic variables. Specifically I want you to explain how each of the 3 tools would work using the chain of events approach.
i. Take each of the 3 monetary policy tools and show how each would work to address the problem of recession. Use the what-happens- next approach to ensure that you are being as specific as possible.
d. Please thoroughly and completely explain how the Federal Reserve would use the 3 tools of monetary policy to address the problem of inflation, including the impact of those tools on the key economic variables. Specifically I want you to explain how each of the 3 tools would work using the chain of events approach.
i. Take each of the 3 monetary policy tools and show how each would work to address the problem of inflation. Use the what-happens-next approach to ensure that you are being as specific as possible.