When was the Federal Reserve created and who does Alan Greenspan report to?
” Bob answered, “The Congress created the Federal Reserve in 1913. Prior to that common people didn’t have faith in the banks. The Federal Reserve changed that. “The duties of the Federal Reserve include promoting sustainable growth and high levels of employment and maintaining stability in purchasing power.” “The Federal Reserve cannot dictate Wal-Mart or GM to sell their goods at particular prices. They cannot tell Google to hire a Seshadhri from IIT. But by decreasing interest rates when it is high, they bring down the borrowing costs for major companies. “If borrowing costs are lower, then naturally the prices of commodities that we pay are always reasonable. Thus, it increases the level of employment. “Actually, the monetary policy is a combination of few things but the critical factor is federal funds rate. The Fed meets eight times a year and decides whether it should raise interest rates, lower it or leave it. The decision of the meeting is closely watched world over because it
