2. Go to the following web site to read the latest minutes of the FOMC: http://w

Question

2. Go to the following web site to read the latest minutes of the FOMC: http://www.federalreserve, gov/fomc #calendars First read A bout the FOMC, and then answer the following questions: a. What is the FOMC? What is its purpose? b. What are the three main tools of monetary policy? c. What is the structure of the FOMC? Then click on "Meeting calendars and information", and then dlick on "statement" next to October 31-November 1. After reading the press release, answer the following questions d. How does the FOMC characterize the current state of the US economy? e. What tools of monetary policy were discussed? f. What did the FOMC decide to do at the meeting? g. Was the vote unanimous?

Explanation / Answer

First 4 subparts are answered below.

a)

FOMC stands for Federal Open Market Committee.

Its purpose is to implement, regulate and monitor open market operations in the economy.

b)

Three main tools of monetary policy: Discount rate , reserve ratio , open market operations

c)

The Federal Open Market Committee (FOMC) consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.

d)

the FOMC characterizes the economy as steadily going, with minor interruptions. Unemployment declined, household spending increased, inflation remained soft and stable.

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