Order Instructions
Assume that the U.S. economy just entered into a
recession. What can the Federal Reserve do to try to get
the economy out of a recession? Among other
comments that you may make, please be sure to discuss
the following:
Describe the role of the Federal Open Market
Committee of the Federal Reserve in the United
States, and describe the tools available to the
Federal Reserve to influence the nation’s money
supply.
O
Discuss the Federal Reserve’s open-market
operations, and the importance of its role. How
does another key central bank around the world
conduct such operations, and why are they
important? What recent open-market operations
have the Federal Reserve and another country’s
central bank taken?
• Explain what happens to the U.S. money supply
when the Federal Reserve buys and sells Treasury
bonds. Describe in detail how this has affected
U.S. banks’ abilities to lend and the overall U.S.
economy.
Explain what has happened to the U.S. money
supply and economy when another central bank
outside the United States has bought and sold
U.S. Treasury bonds.
• How do you think that you will be personally
impacted by the recession?