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Essay heading: Monetary and Fiscal Policies
 
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Issue: Business
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Date added: November 8, 2005
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No of pages / words: 11 / 2843
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Fed officials report regularly to congress and meet with administration officials to discuss their programs. Also, eight times a year the Board of Governors, the President of The Bank of New York, and four other bank presidents meet in Washington to discuss the appropriate discount rate and other subjects...
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But they can be influenced by monetary policy; when demand weakens, the fed lowers interest rates, which in turn stimulates the economy. But continuous stimulus will push the economy's inflation higher and higher, so the fed just tries to smooth out the bumps of natural business cycle. Inflation is an economy wide rise in prices which is bad because it makes it hard to tell if a business product price is going up because of higher demand or inflation...
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