{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ECO3041 - Ch 14 Monetary Policy

ECO3041 - Ch 14 Monetary Policy - Department of Economics...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Department of Economics, FIU Chapter 14 Notes Monetary Policy Prof. Dacal
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter 14 Notes Chapter 14 Monetary Policy Monetary policy is the use of money and credit controls to influence macroeconomic activity. I. The Federal Reserve System Federal Reserve Bank The regional Fed banks perform many critical services, including the following; Clearing checks between private banks Holding bank reserves Providing currency Providing loans Developing macroeconomic models and economic reports. Board of Governors 7 individuals with a 14 year term, they are appointed by the president and confirmed by the U.S. Senate. The Fed Chair The Chairman is selected four year term individual who is appointed by the president. II. Monetary Tools The basic tools of monetary policy are: Reserve requirements Discount rate Open-market operation 2 | P a g e
Image of page 2
Chapter 14 Notes Reserve requirements Required reserve is the minimum amount of reserves a bank is required to hold by government regulation. Denoted by Required reserves = deposits total reserves bank ×total deposits By changing the reserve requirements, the Fed can directly alter the lending capacity of the banking system.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern