Question

What powers does the federal government have over the economy today?

Answer 1

Answer:

The Federal government created the Federal Reserve System (FED), which can control the amount of money circulating in the world at any given time. If growth is slow or slacking, the FED may lower interest rates for people to borrow money and spend, which would help increase circulation in the economy. If inflation is too high, they may raise interest rates to slow down circulation of money until the rates are relatively back to normal. This changes the amount of money that is flowing through the economy, and can determine whether the economy is doing well or not.

~