Chapter 4 - CHAPTER 4 Functions of the Fed 1 CHAPTER 4 OVERVIEW This chapter will A Identify the key components of the Fed B Describe how the Fed

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1 CHAPTER 4 Functions of the Fed
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2 CHAPTER 4 OVERVIEW This chapter will: A. Identify the key components of the Fed B. Describe how the Fed influences monetary policy C. Explain how monetary policy is used in other countries
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3 A. Organization of the Fed 1. Federal Reserve District Banks a. 12 national districts b. New York is considered most important c. Member banks must purchase stock d. Each district has 9 directors e. District banks: 1.) clear checks 2.) replace old currency 3.) provide loans to member banks
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4 A. Organization of the Fed 2. Member Banks a. Required of all nationally chartered banks b. At present, about 35% of all banks are member banks c. Member banks hold about 70% of all bank deposits in the U.S. economyy
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5 A. Organization of the Fed 3. Board of Governors a. Composed of 7 members appointed by the President for a 14 year non-renewable term b. Chair selected by President to serve a renewable 4 year term c. Roles of the Board: 1.) regulate commercial banks 2.) control monetary policy
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This note was uploaded on 09/21/2011 for the course FINANCE 3321 taught by Professor Jianjundu during the Fall '11 term at University of Houston-Victoria.

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Chapter 4 - CHAPTER 4 Functions of the Fed 1 CHAPTER 4 OVERVIEW This chapter will A Identify the key components of the Fed B Describe how the Fed

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