The Federal Reserve s Goal - 887 Words

The Federal Reserve’s goal is to keep the national inflation rate at 2 percent. This change is seen when buying groceries. The price of milk goes from $2 to $2.04. This can prove costly when the 2 percent is added over time. So, why is inflation out pacing minimum wage? The answer, because it will do harm to employees and business owners. Supporters of an increase in minimum wage, the McDonalds employees that demand $15 per hour, argue that they need a â€Å"living pay†. Furthermore, they state that it will bring workers out of poverty and will have little negative effects. There is evidence to support this claim. One of them being that when the minimum wage increased from $6.25 to $7.25, there was no immediate negative effect. Research done by PolitiFact states that, â€Å"the poverty line is $11,670 for a one-person household, $15,730 for a two-person household, $19,790 for a three-person household, $23,850 for a four-person household, and up from there†(Louis). Therefore, increasing the minimum wage would set every worker above the poverty line. However, this is only if all the workers keep their job. According to Paul Samuelson, winner of the Nobel Prize in economics, the problem lies in the decrease of jobs that an increase in minimum wage will create. Samuelson argues, â€Å"What good does it do a black youth to know that an employer must pay him $2 an hour if the fact that he must be paid that amount is what keeps him from getting a job†(Henderson). Samuelson states thatShow MoreRelatedThe Federal Reserve s Goal Essay897 Words   |  4 PagesThe Federal Reserve’s goal is to keep the national inflation rate at 2 percent. This change is seen when buying groceries. The price of mi lk goes from $2 to $2.04. This can prove costly when the 2 percent is added over time. So, why is inflation out pacing minimum wage? The answer, because it will do harm to employees and business owners. Supporters of an increase in minimum wage, the McDonalds employees that demand $15 per hour, argue that they need a â€Å"living pay†. They state that it will bringRead MoreThe Federal Reserve : The Central Bank Of The United States1526 Words   |  7 Pages The Federal Reserve Introduction The Federal Reserve, also known as the Fed is the central bank of the United States. The system was created on December 1913 during the reign of President Woodrow Wilson. It was during this time that President Woodrow signed the Federal Reserve Act, incorporating it into the law. The Congress was behind the creation of the Federal Reserve with the ultimate goal of making it safer and more reliable to keep the money. The Congress was also compelled to establishingRead MoreThe Tour Of Federal Reserve Houston Branch1510 Words   |  7 PagesThe fed tour The tour of Federal Reserve Houston branch was so interesting. After that tour, I was impressive by the Fed’s function. As the textbook mentioned, The Federal Reserve System is the central bank of the United States and is responsible for setting monetary policy and regulating the banking system. [1] So the Fed has play extremely important role in the national economic. Many countries has their own central bank, such as England established their central bank in 1694, japan establishedRead MoreEconomics Analysis : The Federal Reserve Essay1717 Words   |  7 Pagesof the Federal Reserve† a mere recital of the economic policies of government all over the world is calculated to cause any serious student of economics to throw up his hands in despair (pg, 74). The Federal Reserve is now in the business of enforcing the United States government’s drug laws, even if that means making a mockery of both state governments’ right to set their drug policies and the Fed’s governing statutes. 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The tope covered in this paper is the monetary policy which is the policy that decides if unemployment, interest, and inflation decreases or increases. The Monetary policy decides what price a person pays for an item at the store, how much interest a person will get charged onRead MoreThe Federal Reserve System Is The Central Banking System Of The United States987 Words   |  4 PagesThe Federal Reserve system is the central banking system of the United States. It was created because there were a series of panics in the U.S that needed to be controlled in the monetary system. The main points of this system that was created was to originally maximize employment, stabilize prices, and moderate long-term interest rates. It now does much more for example it supervises and regulates banks, maintains the stability of the financial system and provides financial services to depositoryRead MoreThe Federal Reserve Transparency Act1492 Words   |  6 PagesWhen discussing various issues affecting the federal government, transparency issues have to be put on the front line because the Federal Reserve’s should have one of the most transparent systems. The Federal Reserve transparency act was formulated in order to ensure that there is transparency in the federal reserves through making the federal government publicize mo st of the financial institutions that it offers loans to and the organizations which use the open market operations in order to purchaseRead MoreImpact Of Gdp On Consumer Spending939 Words   |  4 Pagesinside of a nation s outskirts in a particular time period, however GDP is normally figured on a yearly premise. It incorporates all of private and open utilization, government expenses, ventures and fares less imports that happen inside of a characterized domain. Gross domestic product = C + G + I + NX, where: C is equivalent to all private utilization, or purchaser spending, in a country s economy ,G is the whole of government spending ,I is the whole of all the nation s organizations spendingRead MoreThe Federal Reserve System Is The Central Banking System Of The United States1459 Words   |  6 PagesIntroduction The Federal Reserve System is the central banking system of the United States. The Federal Reserve System is there to help out when a series of financial hardships and panics happen in our economy. One of the leading changes in the Fed system was the Great Depression. This put the economy in a lot of stress and the banking system in a crisis. There were three objectives for the monetary policy. The three objectives were to increase employment, target the discount rate, and monitor