Menu_25_Apr_11 - 1 12 Federal Reserve Banks(FRBs 2 Board of...

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TODAY’S MENU: Monday 25 April 2011 I. BUSINESS A. Practice Problems 1. Chapter 30: 7-11, 13-15, 20, 21, 24 2. Chapter 31: 5-8, 10, 11, 19 II. SUBSTANCE A. Money: How do banks create it? 1. Model: Money Supply = MB x money multiplier a. MB = Monetary Base = bank reserves + currency in circulation 2. Multiple Deposit Creation: A fairy tale 3. Conclusions a. More deposits, more loans, greater money supply b. Fewer deposits, fewer loan, lower money supply B. The Federal Reserve (Fed): Structure
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Unformatted text preview: 1. 12 Federal Reserve Banks (FRBs) 2. Board of Governors (BoG): 7 members a. 14-year, nonrenewable terms b. Chair: 4-year renewable term 3. Federal Open Market Committee (FOMC) a. 12 voting members (7 and 5) b. 2011: NY, CHI, DAL, MIN, PHIL c. 2012: NY, CLE, ATL, RICH, SF d. 2013: NY, CHI, BOS, KC, STL III. NEXT TIME A. Finish Chapter 31: “Monetary Policy” B. Begin Chapter 36: “International Financial Policy”...
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