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The Fed is important because it keeps America’s monetary system stable and growing with low inflation,...

The Fed is important because it keeps America’s monetary system stable and growing with low inflation, which fosters further growth, which helps keep the economy going in the right direction.


which fosters further growth and which helps keep the economy going in the right direction?
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Answer #1

It is the people as households and businesses that makes right and judicious buying, investment and consumption spending decisions, that fosters the economic growth.

It creates new jobs and unemployment decreases that puts the economy moving in the right direction. Further, it is the monetary policy that regulates the interest rate as well as money supply  in the economy that brings stability in the economy.

Fed works with the objective to bring stability, maximum employment and growth in the economy. It brings growth in the economy when decisions taken up by the Fed, makes households and firms to take right buying and spending decisions so that it creates right amount of aggregate demand and real output increases. In this process, new jobs are also created. It means that purchasing power of people increases and it is said that economy is moving in the right direction.

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