Select an organization that both U.S. and international presences. Write a 1,050

Question

Select an organization that both U.S. and international presences.

Write a 1,050- to 1,400-word paper in which you answer address the following:

What does the president and congress do to stimulate the economy? What does the president and congress do to contract the economy?

What does the Federal Reserve do to stimulate the economy? What does the Federal Reserve do to contract the economy?

What motivates policymakers to stimulate the economy or contract the economy?

Based on your research, what does the Federal Reserve say about its policy goals?

What does the Federal Reserve say about the strength of the economy?

How does the strength of other economies outside of the U.S. affect your organization?

Based on your research, recommend changes in your organization's competitive strategies or supply chain.

Use a minimum of 3 peer reviewed sources not including your textbook.

Explanation / Answer

The Federal Reserve uses various tools to either stimulate or contract the economy. For example, repo rate, reverse repo rate, bank rate, cash reserve ratio, open market operations etc.

These all are the tools available to a central bank to change the economic condition of the economy.

For example, to stimulate the economy or for the expansion of economy, the central bank lowers the reserve requirement ratio, that is, cash reserve ratio is lowered. The result is that now banks has to keep less of money as reserves and loaned out the excess reserves. It will increase the money supply in the economy and the economy expands

Converse is the case with contraction of economy. If central bank wants to lowers the money supply in the economy, they increase the reserve requirement ratio.

Under open market operations, the central bank starts buying bonds when they have the policy of increasing money supply in the economy or expansion of the economy.

And the central bank starts selling the government bonds if they have to achieve the target of contracting the economy.

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