federal_reserve_overview

federal_reserve_overview - The Federal Reserve System Karen...

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The Federal Reserve System Karen Kokernak, Economic Education Specialist June 25, 2009
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Confidential Information 2 Maryland Voluntary Curriculum Content Standard 4.0: Economics B.3 The student will evaluate the effectiveness of current monetary and fiscal policy on promoting full employment, price stability, and economic performance. f. Describe how the Federal Reserve System uses the 3 tools of monetary policy including open market operations, changes in the discount rate and changes in the reserve requirements to influence the economy. g. Describe the effectiveness of monetary policy in achieving economic growth, full employment and price stability. h. Explain how the Consumer Price Index (CPI), the unemployment rate, and the Gross Domestic Product (GDP) measure economic performance. i. Explain how economic instability, including periods of growth and recession, is part of the free enterprise system. j. Explain how inflation reduces the buying power and may contribute to a slow down in the economy.
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3 What exactly is that institution or institutions otherwise referred to as the “Fed”?
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4 What exactly is the “Fed”? 1913 Federal Reserve Act created a central banking system known as the Federal Reserve System, a system of 12 regional banks overseen by the Federal Reserve Board, a government regulatory agency.
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5 “The Federal Reserve has 4 basic overall functions: Serving as a "banker’s bank, Serving as the banker and fiscal agent for the federal government, Regulating and supervising financial institutions, Conducting monetary policy.” Based on 1977 Amendment… Dual Mandate price stability and maximum sustainable output; full employment http://www.richmondfed.org/publications/educator_resources/federal_ reserve_today/)
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6 Organization of the Federal Reserve System
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7 Myth #1 The Federal Reserve System is solely a government agency. “The Fed is an unusual mixture of public and private elements.” “The Board of Governors, located in Washington, D.C., provides the leadership for the System. Twelve regional Federal Reserve Banks
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federal_reserve_overview - The Federal Reserve System Karen...

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