U.S. Federal Government and Economic Issues

(Part 2)

 

The Fed Board of Governors has also issued many enforcement actions on several banking institutions and today foresees that lenders conduct lawful business practices in compliance to federal, state, and local policies.’ (FBR, 2011) `Today, the U.S. federal government is actively involved in the energy sector to invest in alternative energy resources such as solar energy and electric cars with the purpose to improve the U.S economy. Government’s involvement is in regard to the purchasing power of money concerning inflation, unemployment, and to establish price stability. Top leaders are also trying to work better at their applications of inside time lags in economic policy. The recognition time lag is the period where government is yet to recognize the hard to distinguish economic problem. Action time lag is the long time span of identifying the economic issue and implementation of fiscal policy to resolve the problem, which can take a couple of years. An effect time lag is the waiting period to see positive economic results from the enactment and implementation of fiscal/monetary policy. Time lags affect our economy and human lives because any delay in resolving a precise economic problem can result in destabilization of our business cycle.’ (Miller, 2010) Another serious issue is the ?rocky relationship between the United States and China in the open competition stock market. `North American Free Trade Agreement (NAFTA) also caused extreme increases of U.S. trade surplus that caused high budget deficits. The U.S. and China have grown to depend on one another as a deterrent to international conflict, which has caused tensions amongst the two nations. China is using currency to manipulate America for foreign trade interests and economic purposes.’ (Ensinger, and Heffner, 2011) Concerning aggregate supply and aggregate demand, the U.S. Federal Reserve is a manipulative monetary system that consistently monitors and controls a monetary policy, national income, price stability, recession, and inflation. The Federal Reserve is the U.S. Central Bank that assures macroeconomic stability by stimulating money into our economy to prevent inflation. The monetary system conducts ?trustworthy international trades with foreign countries to assure the value of the U.S. dollar. Central Banks have discretionary power to print money, new bills known as medium of exchange in the currency system. Statistically, the Federal Reserve monitors annual gross domestic product, and timely aggregate supply and aggregate demand. Feds balance the money flow in our economy as it influences and moves the U.S. markets. They have the authority to increase interest rates when the U.S experiences an irregular rapid growth and if growth should cease too quickly, Feds will decrease interest rates which encourages consumers to spend money, borrow personal loans, and or expand American businesses. Finally, regarding the textbook, Economics Today, 2010, Miller reports, `the Federal Reserve has control over the monetary policy and acts as a ?lender of last resort for falling financial institutions. Fed’s promote macroeconomic stability and has influence over the U.S. market. They move the U.S. financial market and intervene in foreign currency markets to guarantee an effective money flow; whilst they statistically monitor data, and balances aggregate supply and aggregate demand for the U.S. economy.’ (Miller, 2010) Moreover, this final term can help me tremendously in the Criminal Justice Field because I am now educated in the related Macroeconomics, Microeconomics, and Global Politics. I have obtained valuable information and intelligent knowledge of the U.S. government currency system, the differences in market competitions, import and export of international trade, effects of government time lags, and how to determine supply and demand, along with the dissimilarities of the fiscal and monetary policies and impact of applications.

 

Works Cited

 

Anthony, P., (Feb. 20, 2011), IB Economics: (Section 3. 1-3.2) Macroeconomics: National Income and Introduction to Development, and (GDP Image), 2011 Microsoft Board of Governors of the Federal Reserve System (FBR), Release and last update March 15, 2011, Press Release: FOMC statement http://www.federalreserve.gov/newsevents/press/monetary/20110315a.htm
Ensinger, D., June 20, 2011 – 8:40 AM, `Bill to Repeal NAFTA Stalled in the House’, Copyright 2007 Economy in Crisis http://www.economyincrisis.org/content/bill-repeal-nafta-stalled-house Heffner, T., June 20, 2011 10:05 AM, `Unethical Predatory Practices’, Copyright 2007 Economy in Crisis http://www.economyincrisis.org/content/unethical-predatory-practices
Miller, R, L., (2010), Economics Today, (15th edition), Boston: Pearson Addison-Wesley
Petruno, T., June 18, 2011, U.S. Economy: Federal Reserve: `More Fed Stimulus? – Don’t Count on It!’ Copyright 2011, The Los Angeles Times http://www.latimes.com/business/la-fi-petruno-20110618,0,5811817.column

 

 

Federal Government