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Federal Reserve

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Federal Reserve

The Gross Domestic Product (GDP) is a calculation that provides insight into the current economy of our nation to allow individuals to understand the current and past year’s standings in the economy. The calculation of the GDP allows for the government to determine what adjustments are necessary to manage an effective status for the economy. Based upon the GDP the government can forecast any necessary changes that must be made to either the monetary policy or the fiscal policy. The wealth of a country is based upon the government’s ability to manage the economy through the monetary system and not on the amount of money that is located within that economy. The calculations for the GDP are produced to provide the most accurate totals that can result in a smooth transition for the financial market which allows the government the necessary time needed to react to a recession.

Purpose and Function of Money

The purpose of money is to act in an economy as an asset which allows consumers to trade for a product or services. Money includes four functions: to work as a medium of exchange, a unit of account, a store of value, and a standard of deferred payment (Hubbard & O’Brien, 2010). When used in international transactions money also results in a trade that is easy. Money allows for individuals to feel secure among their transactions and ensures them that a form of payment is guaranteed to them. Most importantly money aids individuals in acquiring the resources that are necessary to live their life.

Central Bank

The Monetary Policy is conducted by the Feds which include seven people from the Board of Gover...

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...n tax breaks. Along with the growth of the economy there are predictions that the rate of inflation will increase.

Works Cited

Investopedia (c) 2010. Dumping. Retrieved from http//www.investopedia.com/terms/d/dumping.asp. Retrieved on August 18, 2010

Lee. Dwight R. "Comparative Advantages Continued" The Freeman:Ideas on Liberty-October 1999. Retrieved from www.http\www.CommonSenseeconomic/Reading/ComparativeAdvantage.

Carbaugh, Robert, Wassink, Darwin. (1992). International dumping: final and intermediate products. Retrieved on August 19, 2010, from http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6W53-45JK7H1-1M&_user=10&_coverDate=07%2F01%2F1992&_rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1436752361&_rerunOrigin=google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=68fed43879d5ff1560c8af4c96253305
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