Macroeconomic Impact on Business Operations The following analysis will be conducted on the macroeconomic impact on business operations. This analysis was conducted to observe the effects of monetary policy on macroeconomic factors that influence GDP, unemployment, inflation and interest rates. It will also identify the tools used by the Federal Reserve to control the money supply, explain how these tools affect the money supply and macroeconomic factors, clarify how money is created, and provide a monetary policy recommendation. Tools Used by the Federal Reserve to Control Money SupplyThe Federal Reserve has an immense impact on the government's macroeconomic business operations. The three sets of tools that allow the Federal Reserve Chairman to direct, influence, and control the money supply will be identified in detail in this analysis. Banks borrow money to lend it, and the money stimulates the economy, and the The spread between the discount rate (DR) and the federal funds rate (FFR) is one such tool that provides this type of control. The two main sources to borrow money from are the Federal Reserve and other banks. If the Federal Reserve charged a lower DR than the FFR (offered by banks), then the bank would be inclined to take advantage of this discount. So if the DR reduces the spread between the DR and FFR increases, this simply has the effect that banks will likely borrow more money from the Federal Reserve rather than from other banks. At the same time, this affects the government's macroeconomic business operations, as the total amount of money in the system increases, which allows more consumers to borrow money to spend more money. This is a typical multiplier effect scenario. However, if the DR increases, the spread will become positive and banks will borrow from other banks.