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Essay / Research Paper Abstract
This 4 page PowerPoint presentation relays basic information about how the Fed Sets interest rates. Free speaker notes included. Bibliography lists 3 source.
Page Count:
4 pages (~225 words per page)
File: RT13_SA746Fed.rtf
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Unformatted sample text from the term paper:
the way that people live. * People who do not earn money, but rather, live on interest, will be hurt when interest rates are lowered. * People who have credit
card debt, or are applying for a mortgage, will be helped when interest rates are lowered. Slide #3: Why are Interest Rates Increased or Decreased? * The Federal
Reserve, or The Fed, has the power to control interest rates. * Essentially, the Fed is the central Bank of the United States and it has goals of sustaining economic
growth and making sure prices are stable ("Interest Rates," 2007). * Thus, it raises or lowers interest rates based on current economic conditions and future projections. Slide #4:
How Does the Fed Decide? * People sit nervously and watch what the chairman does, and predict what he might do. * The following is relayed about former chairman
Alan Greenspan: "As Fed chairman, he set interest rates, and as such was largely responsible for directing U.S. national monetary policy. In essence, Greenspan was the human face of American
capitalism. Twice a year, he gave Congress his assessment of Americas economic status, and millions of investors paid close attention to what he said" ("Alan Greenspan," 2007). Slide #5:
How are Interest Rates Determined? * The Fed creates monetary policy through "setting a target for the federal funds rate, the interest rate that banks charge one another for
very short-term loans" ("Interest Rates," 2007). * Then, when a bank borrows money, it pays what the Fed sets, so their lending rate is affected as well ("Interest Rates," 2007).
* Essentially, the banks are directly affected by the change in the interest rate, and they pass that on to the consumer. Slide #6: How Do Interest Rates Affect
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