How Mutual Funds Affect the Money Supply

Abstract

The purpose of this study is to answer two key questions that arose about mutual funds through coming into contact with them during my internship with IDS Financial Services. The first question I wanted to answer was ''what exactly are mutual funds and what has lead to their recent growth?". Furthermore, I wanted to know ''what effect mutual funds were having on the money supply and Federal Reserve Board policy decisions?" Through researching the topic I was able to define the term mutual funds in all its arenas. and conclude that its popularity stems from its versatility. I also discovered that the answer to my second question was tied specifically to money market mutual funds. In answering these questions I was very methodical. By breaking these two larger questions down into narrower topics I was able to make sure I covered all aspects of my questions.