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Monetary Police In Action
Among the tools used by the Federal Reserve to conduct monetary policy are setting the discount rate and conducting open market operations targeting the federal funds rate. The interest rates targeted by the Fed have a profound impact on the entire economy.
The Fed’s decisions on the discount and federal funds rate influence other interest rates of concern to consumers and firms. Notice how the average 30-
Jim West/Alamy Stock Photo
One million $1 bills on display at the Money Museum in the Chicago Federal Reserve Bank
As the Fed increased the money supply, other countries have increased their holdings of U.S. dollars, mainly as reserves. Part of this is held in actual banknotes, mostly $100 bills. Where are all these $100 bills?