Chapter 15.1, Problem 4R

To determine

To evaluate: The decision by the Federal Open Market Committee that affects the entire financial world.

Explanation of Solution

The FOMC influences the entire financial world by regulating the amount of fed funds. Banks use this rate to provide guidance on all other interest rates. As a result, the rate of fed funds regulates the supply of capital to invest in homes, companies and eventually your income and returns on investment. This has a direct affect on the retirement portfolio value, the cost of the next mortgage, the home's selling price and the potential for the next raise.

Economics Concept Introduction

Introduction: The Federal Reserve System (FRS) is the United States' central bank, and arguably the world's most influential institution of finance. It was developed to provide a free, scalable, and stable monetary and financial framework for the nation.