Banking and Monetary Policy_Butkiewicz_Date__042010

Banking and Monetary Policy_Butkiewicz_Date__042010 -...

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Chapter 11 continued 36: avoid unwanted change in money supple - Defensive open market operation 37: increase borrowing—increase monetary base—increase money supply - Banks rarely borrow 39: reserve requirements—now apply only to checking deposits 40: big increase, want excess must hold more than reserve requirement—increase reserve requirement, decrease money supple so banks increase reserve requirements further 41: excess reserves earn No income - Banks: reclassifying CDs as savings deposits (without you knowing) 42: from 1-5% - Reinforced hope that Fed would interview if crisis got worse/continued 46: Bernanke thought collapse had most affect on small businesses/households 48: treasury borrows money if doesn’t need then deposits it with Fed Like an open market sale - Contractionary policy 50: Feds total assets steady then explodes because of other lending’s it has created—scary for many, inflationary impact 52: central bank picks money supply target and then tries to keep it there (money targeting)
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This note was uploaded on 08/29/2010 for the course ECON 302 taught by Professor Abrams during the Spring '08 term at University of Delaware.

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Banking and Monetary Policy_Butkiewicz_Date__042010 -...

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