Describe,in General Terms,the Strategy of Monetary Policy,explaining How Monetary-Policy Tools

question 27

Essay

Describe,in general terms,the strategy of monetary policy,explaining how monetary-policy tools are used to achieve the goals of monetary policy.What intermediate stages are important in going from tools to goals? What are the links between the different stages? How does the Federal Reserve use this strategy today?

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Definitions:

Immediate Delivery

involves the rapid dispatch of products or services to customers soon after their order is placed.

Exchange

A process where two parties come to a mutual agreement to trade goods, services, or information.

Supply Chain

The network of all the individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, and to its eventual delivery to the end user.

Balance of Power

A situation in international relations where power is distributed among several nations to prevent any one from becoming too strong.