Problem: This solution provide vital clues on why the Federal Reserve establish general and specific rates of interest. This describes the recent tools the Federal Reserve has used to influence the U.S. economy. This looks also into the issue of whether monetary tools have been effective or ineffective in addressing the business cycle.
As the Banks of all banks, the Federal Reserve is given the sole authority in regulating the economy by employing monetary and fiscal policies in response to the changes in the economy.