Federal open market committee Essay Example | Topics and Well Written Essays - 1000 words

Federal open market committee - Essay Example The Federal Open Market Committee plays a key role in setting the rates of interest on loans etc. that are available with banks and other lending institutions. In fact if we consider carefully, monetary and fiscal policy are the two ways in which the money supply and interest rates within an economy are controlled. This has impact on the rates of inflation, employment, job creation, productivity and a whole lot of other factors that form part of our financial and economic well being and affect the National Statistics and state of the economy. In this assignment we are going to take on the role of the Federal Open Market Committee and make a decision on short term interest rates for the USA. Discussion The term ‘Open Market Operations’ refers to the actions of the FOMC in directly controlling the money supply available with banks and indirectly by affecting the rates of interest and lending available with banks (Samuelson & Nordhaus, 2004). If the FOMC has decided to tigh ten monetary supply and credit expansion, it will sell securities in the open market at a higher rate, which have to be picked up by the banks. Using part of their money supply to achieve this objective, it leaves the banks with reduced capacity to give out loans. As the amount of lending has a connection with available reserves, a reduction in lending reserves would automatically put a dent in credit expansion and lending would dry up. So here the FOMC has managed to reduce credit expansion. On the other hand, if it was desired to increase the credit supply in the economy, the FOMC would work to buy securities from the open market and in doing so, give the banks funds which they could use for lending purposes. This would make lending easier and the economy would receive a boost by way of increased trade and investment opportunities. It is notable that Open Market Operations is only one tool at the disposal of the FOMC to control the money and credit available in an economy. Being a Banker to the Government, printer of US currency notes, Bankers Bank, increasing and decreasing the Reserve Ratio, and even applying moral persuasion are some of the ways in which the Federal Reserve seeks to exert a good measure of control on prices, productivity, inflation and employment in the USA (Samuelson & Nordhaus, 2004). Analysis of Current Economic Conditions Let us now move on to the actual statistics at the present time. The CPI as of May 2011 stands at 224.804. Prices have been rising slightly in recent years, as costs to produce goods and services have gone up. The GDP was 15018.1 for Q1 of 2011 and GNP was 15255.1 for the same period. This also registered a slight increase, which may be a combination of price and productivity factors. Total nonfarm private payroll employment stood at 108677 as of June 2011. The Industrial Production Index stood at 92.9815 as of May 2011. All of these figures show a slight increase, indicating that the economy is on the rebound. The I ndustrial Production of Durable Goods was recorded at 88.3948 as of May 2011 and Industrial Production of Final Goods (Market Group) was recorded at 94.6823 for the same period. Increase trends here mean that the economy is still recovering from the depression. The figure for Housing Starts of new privately owned housing units was 560 in May 2011 picking up slightly from 541 units the month before. Number of units authorized but not started hovers around 81. The housing market has been most affected by the depression and will take some time to pick up- at the moment we are seeing lackluster demand despite low interest rates. A lot of homeowners were burned in the last financial crisis. Real retail sales for consumer and food items stood at 172202 in May 2011 registering a drop from 172902 a month before. This means that consumer confidence is still lacking and people are still apprehensive about their next paycheck- consequently consumer spending has hardly picked

Learning Team Reflective Article Essay Example | Topics and Well Written Essays - 500 words

Learning Team Reflective Article - Essay Example The principles of teamwork often exploit the social care theory and practices. The first advantage of teamwork is that it usually improves communication since it is a platform of increasing sharing of ideas, hopes, feelings, and desires among parties who respect and trust each other. Additionally, teamwork encourages flexibility that often depends on willingness to adapt, change, and learns skills of being open minded. The social care theory expects a good care worker to be flexible enough to be able to change in the light of new knowledge since it is the opportunity to acquire new knowledge and skills (Löwstedt, 2007). Team work is also advocated as a means of improving negotiation that is usually considered as the willingness to discuss issues through consultation with clients, management, and colleagues as a means of solving a problem towards discussing to an amicable solution to issues and problems. It should be noted that teamwork sometimes calls for comprise, collaboration, and or confrontation between the involved parties (Löwstedt, 2007). Therefore, teamwork often instills good negotiation skills and must be ready to compromise and relinquish their stand whenever necessary. Teamwork often encourages the growth of skill and ideas due to sharing ideas from different people who are believed to have a different understanding and knowledge in different fields and aspects that the team is involved. Therefore, it is clear theta teamwork increases the productivity of the persons or parties involved in the team work. Team members are often encouraged to work together and share most of the available resources in the implementing the task ahead of them thereby allowing each team member to have a subordinate concern (Löwstedt, 2007). This enables them to contribute their individual knowledge, skills, and resources are meeting the set goals. The collective