With regard to rediscounting, the changes in the discount rate have to be proposed by the central banks or the Fed, prior to being approved or sanctioned by the Board Governors. As a result, it is for this particular reason that rediscounting is not considered to be neither easily reversible nor quickly implemented (Ireland, n
Lastly, there is also the political gain or benefit in terms of having closer union and better cooperation. This, in turn brings about greater closeness with regard to economic associations within the monetary union (Minford, 2002)
money supply will give rise to an increase in E$/£, or in other words, a dollar depreciation. In the same way, a decrease in the money supply will give rise to a dollar appreciation (Mishkin, 2007)
So as to preclude this, the central bank will purchase bonds, in so doing, increasing the amount of non-borrowed reserves, which in turn shifts the supply curve for reserves to the right, and in so doing, maintaining the funds rate of the central bank from rising. The open market purchase will as a result cause the monetary base and the money supply to rise (Schwartz, 2008)