One important aspect of modern finance that separates it from past eras is the pervasiveness and power of central banks. Central banks play a vital role in ensuring the stability and efficiency of banking systems as well as influencing interest rates, bank lending, asset prices, inflation, output, unemployment and other crucial aspects of macroeconomics.
In a two- to three-page paper (not including title and references pages), describe the current state of the U.S. economy using the two monetary aggregates (M1 and M2) currently published by the Federal Reserve. In your description, illustrate the trends of the two monetary aggregates. Evaluate what the Federal Reserve Bank is trying to accomplish by implementing these policies to stabilize the business cycle. Support your work with at least two scholarly resources in addition to the textbook.
Reference:
Knoop, T.A. (2008). Modern Financial Macroeconomics: Panics, Crashes, and Crises. Malden, MA: Blackwell Publishing. ISBN: 9781405161817