Question

Examine the monetary policies in place in the early 2000s in relation to their effects on macroeconomic issues. For instance, consider the discount rate set by the Fed, the rates on reserves, open market operations, and so on.

•Remember that the Federal Reserve controls our monetary policy and they have four main goals: price stability high employment economic growth and financial market stability

please relate the answer to the early 2000s and if possible please add a reference, thank you!

Answer 1

The Discount Rates set by Fed in early 2000s were high for the reason of giving an head start to the business activities with the country. The concept of outsourcing had been on a high note during that period and hence rates on reserves and open market operations were introduced by the state in form of monetary policies to control the inflation and keep the rate of employment in the country as constant.

Economic growth of the country was thus reduced in order to a control on the Price Stability by Fed.

For High Employment minimum rate of wages were defined in order to bring crystal clear frame in the market.

For economic growth increase in taxes was introduced and thus keeping the spending constant

Answer to costly bank rates was also been made smooth by the Federal in this regard