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Class Notes

Federal Reserve System - United States1

This Class Presentation offers insights into the operations and significance of the Federal Reserve System in the United States.

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    NAME

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    WHAT ARE THE FACTORS THAT WOULD INFLUENCE THE FEDERAL RESERVE IN ADJUSTING THE DISCOUNT RATE?  Weak Economy.  Low Employment Levels.  High Prices Fluctuation.  Low Economy Production Capacity.  High Federal Funds Rates.

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    H OW DOES THE DISCOUNT RATE AFFECT THE DECISIONS OF BANKS IN SETTING THEIR SPECIFIC INTEREST RATES ?  Lower Discount Rates : 1. Banks borrow more reserves 2. Increase in loan offers. 3. Lower interest rates .  Increase Discount Rates : 1. Bank reserve decrease. 2. Fewer loans offers. 3. Higher interest rates.

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