Federal Reserve System

The choice of methods and tools of monetary policy should be the prerogative of the central bank, ie Unlike the strategic and intermediate goals monetary policy from the tactical need to be in the fact that implements tactical objectives is the central bank of the state. For example, consider the practice of monetary management in the U.S.. Federal Reserve System determines the following basic objectives of monetary policy: – maximum employment – price stability – abstinent long-term interest rates. Each of these goals is very important for society, but because the power structures set the task to realize their fullest extent. But using only monetary policy simultaneously achieve all the goals impossible. Therefore, given the considerable experience in the U.S.

in the field of monetary management, consider the named targets in more detail. The maximum level of employment is desirable, but what the boundary of this level? At what level we can say that the economy operates under full employment? Can we consider this phenomenon, provided that the unemployment rate is zero? Unequivocal answer to these questions is very difficult to give. The purpose of the high level of employment should be the level of unemployment, which more than zero but equal to a job offer and meets the employment in which job demand is equal to the job offer. Such a level in economic circles is called the natural rate of unemployment. Economic growth is very closely linked to ensure a high level of employment, as companies invest more heavily in investment to increase productivity.