Money Interest Rates important individuals businesses making decisions finance purchases. The articles deal assessing conditions finance purchases important aspects policy. Allen, Bruce.

Interest Rates

The high unemployment and inflation rates are some of the most important factors that threaten to affect the stability of the U.S. economy. As a consequence, the Federal Reserve is forced to orient its strategy towards reducing the money supply. There are several methods and tools that the Federal Reserve can use in order to reduce the money supply. For example, the Fed can sell government bonds. These securities are directed towards the public, like banks, financial institutions, and individual investors. In this case, this strategy is associated with increasing interest rates.

Another strategy used by the fed in reducing the money supply is represented by modifying the discount rates of banks borrowing from the Fed. This strategy also affects the federal funds rate that is...
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