Currency and Central Bank
Main articles: United States dollar and Federal Reserve SystemThe 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.)
“In a large university, there are as many deans and executive heads as there are schools and departments. Their relations to one another are intricate and periodic; in fact, “galaxy” is too loose a term: it is a planetarium of deans with the President of the University as a central sun. One can see eclipses, inner systems, and oppositions.”
—Jacques Barzun (b. 1907)
“The prairies were dust. Day after day, summer after summer, the scorching winds blew the dust and the sun was brassy in a yellow sky. Crop after crop failed. Again and again the barren land must be mortgaged for taxes and food and next year’s seed. The agony of hope ended when there was not harvest and no more credit, no money to pay interest and taxes; the banker took the land. Then the bank failed.”
—Rose Wilder Lane (1886–1968)