The actions of the Federal Reserve have helped Nike to prosper by controlling inflation, reducing unemployment, increasing the standard of living for most Americans, and providing a stable foreign exchange rate (Weston et al, 1990). The Federal Reserve:
Regulates money supply and interest rates
Aims to encourage economic growth, control inflation, reduce unemployment to acceptable levels, and stabilize the exchange rate between the U.S. dollar and foreign currencies in the foreign exchange marketplace
Can bring about government impact to the economy by determining monetary policy and regulating the cost of money (Weston & Brigham 97)
Alan Greenspan writing in Federal Reserve Bulletin suggests that the role of Federal Reserve Bank involves three basic duties:
Keeping the banking, financial, and payments systems safe, sound, and stable
Providing financial services to the government and the public
Implementing monetary policy for the health of the economy and the promotion of national economic goals, using open market operations, the discount window and reserve requirements (Greenspan 373). This results in more Nike products being sold and gives Nike the confidence to invest in capital expenditures.
Sociographic information, available from the U.S. Census Bureau (Wilson, 1998, 44), can provide a complete demographic breakdown of NikeÆs target market, including age; income; population change statistics; race; and lifestyles segments or choices.
The FedÆs control of interest rates by lowering the required reserves or the discount rate also affects Nike (Angell 1132). It plans to gradually increase interest rates (Wessel, 2004).
The FedÆs effectiveness is a matter of some dispute.
Steve Forbes, Forbes magazine, suggests that the Fed is losing touch with the complexities of the U.S. economy when it comes to the cost of money and that its adjusting of short-term interest rates is clu
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