Problem Solving - United States' Monetary Policy

United States' monetary policy effects many economic and financial decisions people make in this country. For example to get a loan to purchase a house boat, condo are maybe planning a summer vacation, or buying stock in a company. The United States is the primary economic source for money supplies it has major economic and financial effects on other countries. The purpose of is to manipulate the performance of the economy in such factors as inflation, economic output, and employment. It works on people across the country affecting the demand in the economy meaning how the good and services are spend. The nation's central bank The federal reserve system which conducts the money supply system. Raising and lowering short-term interest rates is one of the influences on demand of the monetary policy. Fiscal policy is popular among Americans today, its affect demands such as taxes and government spending; on the other hand many are less familiar with the monetary and its tools. In this paper, I will discuss monetary policy and its effect on macroecomic factors such as GDP, unemployment, inflation and interest rate.

Economic growth can be measured as increase in real GDP over time or an increase in real GDP per capita over time. Whichever way you define it's a percentage rate of growth per quarter or year whichever one you decides to use. Growth is a widely held economic goal. With this being said it can help out in a major way. An economy who's experiencing challenging problems will survive. Rising wages can help out with more grocery in the household, extra cash for a family vacation or maybe put extra money aside for a college education. A growing economy can help out without controlling investment and public goods production.

In order to measure unemployment we must find out who is eligible to work and available to work. There are three types of unemployment: frictional, structural and cyclical. Frictional is when you are between jobs, this could be from getting fired, laid off, are just doing seasonal help. Also in this category means that you're looking for your first job, in today's economy this type of employment persists. Frictional unemployment consists of search and wait unemployment, meaning that someone is searching are waiting on a job to come open in the near future.