Notes

Question 2

(16 points) Describe monetary policy and its influence on financial institutions and markets. Your answer should focus on recent Federal Reserve activity (especially as associated with the COVID-19). (Assigned summary articles should prove helpful, but should not be considered as the only possible sources.) Your answer may be, at most, four (4) pages following standard style rules set forth in the course syllabus.

Investopedia Staff. “Monetary Policy Definition.” Investopedia, Investopedia, 12 Dec. 2020, www.investopedia.com/terms/m/monetarypolicy.asp.

Rewrite this:
Monetary policy, the demand side of economic policy, refers to the actions undertaken by a nation's central bank to control money supply and achieve macroeconomic goals that promote sustainable economic growth. Monetary policy is the process of drafting, announcing, and implementing the plan of actions taken by the central bank, currency board, or other competent monetary authority of a country that controls the quantity of money in an economy and the channels by which new money is supplied. Monetary policy consists of the management of money supply and interest rates, aimed at meeting macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity. This is achieved by actions such as modifying the interest rate, buying or selling government bonds, regulating foreign exchange (forex) rates, and changing the amount of money banks are required to maintain as reserves.

Good Time line of info:
Cheng, Jeffrey, et al. “What's the Fed Doing in Response to the COVID-19 Crisis? What More Could It Do?” Brookings, The Brookings Institution, 30 Mar. 2021, www.brookings.edu/research/fed-response-to-covid19/.

Straight from the horse's mouth:

“Coronavirus Disease 2019 (COVID-19): General Frequently Asked Questions.” Board of Governors of the Federal Reserve System, Board of Governors of the Federal Reserve System, www.federalreserve.gov/covid-19-faqs.htm.