1 page/≈275 words
Describe An Event Which Its Result Appears To Be Against Its Original Purpose (Essay Sample)
Please focus on expressing original thoughts and the usage of language to show maximized writing skills. Please choose a historical event before world war 2 that is both evocative and fits the topic the most. Thank you very much:)source..
FED’S Open Market Policy
Date of submission
FED’S Open Market Policy
After the end of WWI, Benjamin Strong the governor of the New York FED realized that power of open market instead of relying on gold as a central factor in the control of credits. Strong managed to increase government's recession from 1923 by purchasing government securities that influenced the availability of credits in the banking sector of the USA (Wheelock, 1989). The banks adopted the open market policy in their own monetary policies. This policy enabled people to borrow money due to the "boom" effect as well as to encourage domestic businesses and increase European monetary exchange. However, the policy resulted to the inability to control the flow of reserves. Furthermore, the FED management never took into consideration the negative effects especially on the stock market which later proved to be detrimental to the country’s economy. Thus, the economic disadvantages were heavier than its advantages (Wheelock, 1989).
The objectives of the open market policy as enacted by the FED artificially lowered the rates for borrowing for the consumers to ensure domestic development and recession from the initial crisis in during the WW1 caused by the inflation of monetary supply. However, this objective was not met as the FED immediately raised the rates of interests in the banks which led to severe deflation coupled with a sharp drop in the prices of commodities and the stock market (Wheelock, 1989). Most consumers sold off all their invested properties due to the strength of dollar coupled with a great red...
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:
You Might Also Like Other Topics Related to world war 2:
- World War 2, Causes And Results, History Research Description: World War II started in 1939, and dragged on for six years until 1945, when the allied forces defeated both Japan and Germany...1 page/≈275 words | 2 Sources | APA | History | Essay |
- JF Kennedy Assassination Research Assignment PaperDescription: Focus on the Foreign government ( Russia or Cuba ) who had more to gain from JFK assassination? Why? How? Who's the main suspect?...3 pages/≈825 words | 5 Sources | MLA | Literature & Language | Essay |
- American Architecture Between World War I And World War 2Description: How does Louis Kahn's work diverge from that of his predecessors and contemporaries? In what ways is it similar?...2 pages/≈550 words | 5 Sources | Chicago | Social Sciences | Essay |