[VIDEO] How the Federal Reserve Works

June 23, 2017

When the economy was on the verge of collapse due to the 2008 financial crisis, the Federal Reserve dropped interest rates to zero in an effort to get money moving around again. The economy is not in such dire straits now, of course, so the Fed has once again returned to raising rates gradually. This video quickly reviews how the Fed works and demonstrates the ways that the central bank affects the nation’s money supply.  

Questions:

  1. What are the Federal Reserve’s two main goals?
  2. How would the Fed act if it wanted to increase the nation’s money supply?

One Response to [VIDEO] How the Federal Reserve Works

  • 1. The Federal Reverse’s two main goals are to make sure everyone has a job and to make sure prices are stable.
    2. If the Fed act wanted to increase the nation’s money supply, they would use their three main steps to cut interest rates and make it easier to borrow money.

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