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Macroeconomics

Macroeconomic Impact on Business Operations
“Job Weak, Unemployment Soars, More Cuts coming, and Bankruptcies Jump 40%.” These are typical headlines we see in the newspaper, internet, and journals. We also hear these in news, radio stations and office chats. These are valuable information that economists use to analyze economic situation of the country. These can also be information that individual use to guard their spending. Information like these provides major decision for individual and for the country as a whole.
For a country to be progressive, economic decision is of prime importance. Achieving full economic stability is dependent on a lot of factors. Two of the most widely used key indicator in economic decision is the country’s fiscal and monetary policy.
Monetary policy affects all kinds of economic and financial decisions people make in a country, whether to get a loan, build a new house, buy a car or to start up a business, whether put to savings in a bank, invest in a stock market, or invest in a capital asset. Because dollar is use as the standard unit of currency in international market, monetary policy of the United States has significant economic and financial effects on other countries. Just like monetary policy, fiscal policy also affects decisions people make in their finances. Both monetary and fiscal policies are controlled by the government to manage the supply of money, or trading in foreign exchange market.
Monetary Policy and Tools that Control the Supply of Money
“The Federal Reserve System is the central banking system of the United States. Created in 1913 by the enactment of the Federal Reserve Act, it is a quasi-public banking system composed of (1) the presidential-appointed Board of Governors; (2) the Federal Open Market Committee; (3) 12 regional Federal Reserve Banks located in major cities throughout the nation acting as a fiscal agent for the US treasury, each with its own nine-member board of directors; (4)...