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Banking and Monetary Policy_Butkiewicz_Date__041510

Banking and Monetary Policy_Butkiewicz_Date__041510 -...

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Chapter 11 - Movie clip from its a wonderful life to demonstrate bank run 3: Only state that contains two Federal Reserve districts is Missouri 4: No political approval of head of 12 FR Banks - 5/12 get to decide on monetary policy but congress wants power over them 6: $100 is the biggest Fed note in the US 7: Bank reserve is not just with Fed - About 2700 in cash for every person in the US b/c most US currency circulates outside the US (more than 50%) 8: Open-market operations: expansionary and contradictionary - Fed wants to put more money, print more and put into the system 11: TAF- ones who agree to pay most interest get the $ 12: Two ways fed can influence monetary base - buying securities in open markets
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Unformatted text preview: -making loans to banks 13: Our decisions with $ affect bank reserves, not monetary base 18: R/D- how much of deposits banks actually keep in reserve-How does it work? Withdrawals and deposits are offsetting (roughly =) 22: Every time bank makes loan, money supply increases 23: Shows how process works -(Increase MS, base stays the same)—not an infinite process 24: Know these formulas! 26: m=money multiplier 27: Money supply determined by Fed monetary base, how much currency we choose to hold and how much banks hold 28: Fed uses control over money reserve to control the economy 29: Multiplier used to be MUCH bigger KNOW GREAT DEPRESSION SLIDES!!...
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