assign6 - Intro Macro N. Sheflin ASSIGNMENT 6 NOTES: We...

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I n t r o M a c r o N . S h e f l i n ASSIGNMENT 6 NOTES : We introduce Money, Banking and the Federal Reserve. You should be able to answer the following: Lots here, interesting, simple, important. You are responsible for only the SIMPLEST of t-accounts What’s money and why is it good (for the economy?) How is money created and controlled? How do banks ‘work’ and what do banks have to do with money? What’s leverage? Net worth? What’s the Fed? What determines interest rates? What’s the role of the financial system in the broader economy? Also, sum of infinite geometrically declining series pops up here (as it did in the expenditure multiplier) – see notes below. Investment Game – review of round 1 – buy something, read investopedia, get rich. READING Parkin Chapter 9 (Money, the Price level and Inflation). SKIP the section on the Quantity Theory of Money for now . Also, the Wikipedia entry is good on the history of money: http://en.wikipedia.org/wiki/History_of_money Short, simple article on capital and leverage in banking at: www.mercatus.org/PDFDownload.aspx?contentID=26042 Additional background at: Brief History and Background at http://minneapolisfed.org/econed/curric/history.cfm Some Money Facts from PBS at http://www.pbs.org/moneymoves/money_facts/ U.S. Money History at http://www.frbsf.org/publications/federalreserve/annual/1995/history.html The face of money – what’s on a bill at http://minneapolisfed.org/econed/curric/pictures.cfm More, if you have the stamina The Federal Reserve Board of Governors Web Site http://www.federalreserve.gov/ Look at the American Currency Exhibit (Take the Tour) http://www.sf.frb.org/currency/index.html Some interesting pictures of early money at http://www.thebritishmuseum.ac.uk/worldofmoney/world_what.html Fedpoints have great short introductions to various monetary policy topics. Look here: http://www.newyorkfed.org/aboutthefed/fedpoints.html and look at Who We Are and What We Do Board of Governors of the Federal Reserve System Federal Open Market Committee Currency Processing and Destruction How Currency Gets into Circulation Federal Funds Rate And anything else that looks interesting Key points and Summary– read carefully before and after the homework.
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480 Definition and role of money – anything widely accepted in exchange. Money has three primary roles medium of exchange
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This note was uploaded on 02/29/2012 for the course 320 322 taught by Professor Macro-williams,micro-yoshi during the Fall '10 term at Rutgers.

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assign6 - Intro Macro N. Sheflin ASSIGNMENT 6 NOTES: We...

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