ib_p03_skillsexam - T he F eder al Click to edit Master...

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Unformatted text preview: T he F eder al Click to edit Master subtitle style Chad H ansen M acr oeconomics 210 Reser ve Agenda Over view The Feder al Reser ve is t he cent r al banking syst em of t he Unit ed St at es Consist s of a cent r al Boar d of Gover nor s, 12 r egional r eser ve bank s, and numer ous member bank s I mplement s monet ar y policy By Adriana Madison M onet ar y Policy Cont r ol t he money supply Regulat e bank r eser ves Change int er est r at es By Adriana Madison Cont r ol t he M oney Supply L ow gr owt h r at e of money supply incr eases int er est r at es so t he Feder al Reser ve pur chases US Tr easur y secur it ies which put s mor e money in cir culat ion H igh gr owt h r at e of money supply causes inf lat ion so t he By Adriana Madison Regulat e Bank Reser ves A bank lends out most of it s money The Feder al Reser ve can incr ease r eser ves t o pr ot ect t he account holder s but t his makes loans har der t o obt ain and incr eases int er est r at es By Adriana Madison Change I nt er est Rat es The Feder al Reser ve dir ect ly set s t he discount r at e which is t he pace at which it lends money t o t he bank s Raising t he discount r at e r educes t he money supply and slows t he economy L ower ing t he discount r at e incr eases t he money supply and expands t he economy By Adriana Madison Questions? By Adriana Madison ...
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This note was uploaded on 04/08/2008 for the course CISC 104 taught by Professor Lynch during the Spring '08 term at Northampton Community College.

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ib_p03_skillsexam - T he F eder al Click to edit Master...

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