Economy of The United States - Currency and Central Bank

Currency and Central Bank

Main articles: United States dollar and Federal Reserve System

The United States dollar is the unit of currency of the United States. The U.S. dollar is the currency most used in international transactions. Several countries use it as their official currency, and in many others it is the de facto currency.

The federal government attempts to use both monetary policy (control of the money supply through mechanisms such as changes in interest rates) and fiscal policy (taxes and spending) to maintain low inflation, high economic growth, and low unemployment. A private central bank, known as the Federal Reserve, was formed in 1913 to supposedly provide a stable currency and monetary policy. The U.S. dollar has been regarded as one of the more stable currencies in the world and many nations back their own currency with U.S. dollar reserves.

The U.S. dollar has maintained its position as the world's primary reserve currency, although it is gradually being challenged in that role. Almost two-thirds of currency reserves held around the world are held in US dollars, compared to around 25% for the next most popular currency, the Euro. Rising US national debt and quantitative easing has caused some to predict that the US Dollar will lose its status as the world's reserve currency, however these predictions have not come to fruition.

Read more about this topic:  Economy Of The United States

Famous quotes containing the words currency, central and/or bank:

    “Money is the worst currency that ever grew among mankind. This sacks cities, this drives men from their homes, this teaches and corrupts the worthiest minds to turn base deeds.”
    —Sophocles (497–406/5 B.C.)

    “But when the self speaks to the self, who is speaking?—the entombed soul, the spirit driven in, in, in to the central catacomb; the self that took the veil and left the world—a coward perhaps, yet somehow beautiful, as it flits with its lantern restlessly up and down the dark corridors.”
    —Virginia Woolf (1882–1941)

    “When women can support themselves, have entry to all the trades and professions, with a house of their own over their heads and a bank account, they will own their bodies and be dictators in the social realm.”
    —Elizabeth Cady Stanton (1815–1902)