Federal Reserve System

Federal Reserve System - other deposits other Fed...

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Federal Reserve System From Last Time If currency in circulation increases, why does the monetary base decrease? It doesn't. The monetary base is equal to currency in circulation plus reserves. If we take into account all the possible sources of change in the monetary base, the monetary base is equal to securities + discount loans + cash items in process of collection + gold and SDR's + currency held by Fed + other Fed assets - Treasury cash holdings - U.S. Treasury deposits - foreign and other deposits - other Fed liabilities - deferred availability cash items. The base will increase with an increase in securities, discount loans, cash items in process of collection, gold and SDR's, currency held by Fed, or other Fed assets. The base will decrease with an increase in Treasury cash holdings, U.S. Treasury deposits, foreign and
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Unformatted text preview: other deposits, other Fed liabilities, or deferred availability cash items. • How can raising taxes be an asset to the public? It's not; taxes due are a liability for the general public. Paying the taxes you owe eliminates that liability. Organization 1. District Banks 2. Board of Governors (chairman is Alan Greenspan) 3. Federal Open Market Committee Functions The Federal Reserve serves as this country's central bank: 1. issues paper currency 2. controls money supply 3. acts as the bankers' bank o accepts deposits from banks and makes loans to banks o clears checks by transferring funds between banks 4. supervises and inspects commercial banks 5. acts as the federal government's bank o handles the sale and repayment of government bonds o buys and sells foreign currency...
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