How does the Federal Reserve actions effect small and large

Solution

As we know that Federal Reserve’s has many statutory rights to set the monetary policies, sanctioning loan rates, measures for promoting more job creations, price mechanism , forex reserves etc. It look the matters related with open market operations, credit control, cash reserve requirements etc.

The slight changes in monetary or any policy will have impact on stock markets like NYSDAQ, NSE, FOOTSEE, NIKKON etc. With increasing or decreasing rates like repo, reverse repo, CRR, etc, a business might get costlier loan so it will suffer a lot as new projects couldn’t be started by it. Even, larger companies will have to make more security arrangements so as to get business loan to expand its business operations or maintain to the running operations to the global projects. A small firm cannot provide more salary to its new hiring due to greater loan and security involvements of the fund.