The Demand for Money p Explain the two reasons people demand to hold their wealth in the form on money.
|
|
|
- Georgia James
- 6 years ago
- Views:
Transcription
1 Financial Sector Reading Guide Chapters 13, 14 and 15 Chapter 13: Money and Banking 1. Identify and describe the functions of money. 2. Define money supply and other financial assets. 3. Define and list factors influencing money demand. 4. Explain the role of the Federal Reserve System in the economy. The Functions of Money p List and explain the three functions of money. The Supply of Money p Explain the difference between M1, M2 and M3. The Demand for Money p Explain the two reasons people demand to hold their wealth in the form on money. The Money Market p Draw a properly labeled graph representing the money market 6. Why is Sm represented with a vertical line? 7. What is the price of money? The Federal Reserve and the Banking System p Explain the structure of the Fed including the Board of Governors, the FOMC, and the 12 Fed banks. 8. List and explain the functions of the Fed?
2 Chapter 14: How Banks and Thrifts Create Money 1. Define a fractional banking system 2. Describe the process of money creation and multiple deposit expansion. 3. Given data, determine the size of the money multiplier and asses its impact on the money supply The Balance Sheet of a Commercial Bank p Explain what the balance sheet of a commercial bank shows. Prologue: The Goldsmiths p Explain how a fractional reserve banking system works. A Single Commercial Bank p Suppose the Bank of Wahoo comes into existence with citizens depositing $100,000 in checking accounts at the bank. Draw the bank s balance sheet showing THIS TRANSACITON ONLY. 4. How does this one transaction change the economy s supply of money? (p.267) 5. Suppose that there is a 10% required reserve ratio for the Bank of Wahoo. Given the balance sheet that was created to answer question 3, how much money must the bank keep as required reserves? 6. Given the information in question 5 regarding required reserves, complete the following balance sheet for the Bank of Wahoo. Bank of Wahoo 7. Required reserves are NOT meant to provide for commercial bank liquidity! What is the purpose of required reserves? (p. 269)
3 8. What happens to the money supply when... the bank makes loans? (p. 271) loans are repaid? (p. 272) the bank buys government securities or bonds? (p. 273) 9. Explain why a bank might choose to borrow money in the Federal funds market. (p. 273) The Banking System: Multiple-Deposit Expansion p The reserve requirements for First National Bank is 20%. Suppose that John deposits $100 in First National Bank. Record ONLY this deposit on the balance sheet below. First National Bank 11. Does this $100 deposit alter the money supply? (p. 274) 12. How much of this $100 can First National Bank lend? 13. Suppose that First National Bank loans out ALL of their excess reserves. When the borrower gets the loan, suppose he gives it to someone who deposits it in Second National Bank. Record ONLY this deposit on the balance sheet below. Second National Bank 14. What is the money multiplier formula? Explain how it is used to find the maximum amount of new checkable deposit money that can be created by the banking system. 15. Explain this statement, The monetary multiplier works in both directions. (p. 277)
4 Chapter 15: Monetary Policy 1. Identify and examine the tools of central bank and their impact on money supply and interest rate. Tools of Monetary Policy p What tools can the FED use to influence the banking system s ability to create money? 2. What do open-market operations consist of? 2. When the FED buys securities (government bonds)... (p ) commercial banks reserves Therefore banks will loan And the money supply will 3. When the FED sells securities... (p ) commercial banks reserves Therefore banks will loan And the money supply will 4. When the FED raises the reserve ratio... commercial banks required reserves commercial banks excess reserves will Therefore banks will loan And the money supply will 5. When the FED lowers the reserve ratio... commercial banks required reserves commercial banks excess reserves will Therefore banks will loan And the money supply will 6. Explain who the lender of last resort is. 7. What is the discount rate? 8. When the FED lowers the discount rate... commercial banks reserves Therefore banks will loan And the money supply will
5 9. When the Fed raises the discount rate... commercial banks reserves Therefore banks will loan And the money supply will Monetary Policy, Real GDP, and the Price Level (p ) 10. If the economy is in a recession... the FED should... the problem is. the money supply by... the excess reserves in commercial banks by... securities or... the reserve ratio or... the discount rate. This is an money policy Interest rates will and... Investment spending will and... Aggregate demand will and... Real GDP will. 11. If the economy has inflation the FED should... the money supply by... the excess reserves in commercial banks by... securities or... the reserve ratio or... the discount rate. This is a money policy Interest rates will and... Investment spending will and... Aggregate demand will and... Inflation will. Effectiveness of Monetary Policy p How is monetary policy isolated from political pressure and why is that important?
2010 Pearson Addison Wesley CHAPTER 1
CHAPTER 1 Money has taken many forms. What is money today? What happens when the bank lends the money we re deposited to someone else? How does the Fed influence the quantity of money? What happens when
Practice Test Macroeconomics Spring 2008 Chapter 16 The Monetary System
Practice Test Macroeconomics Spring 2008 Chapter 16 The Monetary System MULTIPLE CHOICE 1. Mia puts money into a piggy bank so she can spend it later. What function of money does this illustrate? a. store
Chapter8 3/5/2018. MONEY, THE PRICE LEVEL, AND INFLATION Part 1. In this chapter: Define money and its functions
Chapter8 MONEY, THE PRICE LEVEL, AND INFLATION Part 1 https://www.yahoo.com/finance/news/feds-williams- youre-living-in-an-almost-goldilocks-economy- 191512496.html In this chapter: Define money and its
THE MEANING OF MONEY. Chapter 29. The Monetary System
Chapter 29. The Monetary System THE MEANING OF MONEY Money is the set of assets in an economy that people regularly use to buy goods and services from other people. slide 0 slide 1 The Functions of Money
CH Lecture. McGraw-Hill/Irwin Colander, Economics 1-1
CH 30+31 Lecture McGraw-Hill/Irwin Colander, Economics 1-1 Money 2 The Definition and Functions of Money Money is anything that is generally accepted as payment for goods or services Money is a highly
BANKING AND THE FEDERAL RESERVE SYSTEM
Name Date Period BANKING AND THE FEDERAL RESERVE SYSTEM BEFORE YOU BEGIN Looking at the Fill in the blank spaces with the missing words. Structure of the Fed The Federal Reserve System Functions of the
The Federal Reserve System
SECTION 3 The Federal Reserve System What Is the Federal Reserve System? In 1913, Congress passed the Federal Reserve Act. This act established the Federal Reserve System, which is also known as the Fed.
Motives for holding money
Money Financial asset that pays a relatively low return -- why do people hold it? Fractional reserve banking -- the money creation process. Banking panics and bank runs. Motives for holding money Medium
MONEY, THE PRICE LEVEL, AND INFLATION
25 MONEY, THE PRICE LEVEL, AND INFLATION What is Money? Money is any commodity or token that is generally acceptable as a means of payment. A means of payment is a method of settling a debt. Money has
CHAPTER 10: MONEY, BANKS AND THE FEDERAL RESERVE
CHAPTER 10: MONEY, BANKS AND THE FEDERAL RESERVE Learning Goals To know what is money To know how banks create money To know the structure of the Federal Reserve System To know how the Fed controls the
Chapter 16: The Federal Reserve and Monetary Policy Section 3
Chapter 16: The Federal Reserve and Monetary Policy Section 3 Chinese Proverb: No matter if it is a white cat or a black cat, as long as it can catch mice, it is a good thing. Chinese proverb popularized
Section 5 - The Financial Sector
Section 5 - The Financial Sector Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Which of the following assets is the MOST liquid? A. checkable bank deposits
Multiple Choice Identify the letter of the choice that best completes the statement or answers the question.
Chapter 16 review Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Why does the Federal Reserve alter monetary policy? a. to regulate the
The Influence of Monetary and Fiscal Policy on Aggregate Demand
Chapter 32 The Influence of Monetary and Fiscal Policy on Aggregate Demand Test B 1. Of the effects that help explain why the U.S. aggregate demand curve slopes downward the a. wealth effect is most important
Money Creation. McGraw-Hill/Irwin. Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
32 Money Creation McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. AGENDA Thurs 3/17 Team Teaching: CH 31-32 P3: Allan, Ezra, George P5: Ms. K (no surprise) On Deck:
Unit 4: Money, Banking, and Monetary Policy
Unit 4: Money, Banking, and Monetary Policy 1 Showing the Effects of Monetary Policy Graphically Three Related Graphs: Money Market Investment Demand AD/AS 2 Interest Rate (i) S&D of Money S M S M1 Interest
Exercise Chap 34. Student:
Exercise Chap 34 Student: 1. A decrease in the interest rate will cause a(n): A. Increase in the transactions demand for money B. Decrease in the transactions demand for money C. Decrease in the amount
The Federal Reserve & Monetary Policy
The Federal Reserve & Monetary Policy Essential Standards SSEMA2B: Describe the organization of the Federal Reserve System (12 Districts, Federal Open Market Committee (FOMC), and Board of Governors. SSEMA2C:
5. What is the Savings-Investment Spending Identity? Savings = Investment Spending for the economy as a whole
Unit 4 Test Review KEY Savings, Investment and the Financial System 1. What is a financial intermediary? Explain how each of the following fulfills that role: Financial Intermediary: Transforms funds into
Chapter 16: The Federal Reserve and Monetary Policy
SCHS SOCIAL STUDIES What you need to know UNIT 6 1. Describe the structure of today s Federal Reserve System 2. Describe how the Federal Reserve serves the federal government 3. Understand why some monetary
Unit: Monetary Policy
Unit: Monetary Policy 2 3 Showing the Effects of Monetary Policy Graphically Three Related Graphs: Ø Money Market Ø Investment Demand Ø AD/AS Interest Rate (i) S&D of Money S M S M1 Interest Rate (i) Investment
ECO 2013: Macroeconomics Valencia Community College
ECO 2013: Macroeconomics Valencia Community College Final Exam Fall 2008 1. Fiscal policy is carried out primarily by: A. the Federal government. B. state and local governments working together. C. state
CHAPTER 32 Money Creation
CHAPTER 32 Money Creation A. Short-Answer, Essays, and Problems 1. What is the history behind the idea of a fractional reserve banking system? Early traders used gold in making transactions. They realized
MONEY. Economics Unit 4 Macroeconomics Just the Facts Handout
MONEY Economics Unit 4 Macroeconomics Just the Facts Handout Barter Economy A barter economy is an economy with no money. The only way you can get what you want in a barter economy is to trade something
Monetary Policy Agenda. The Federal Reserve System. The Federal Reserve System. The Federal Reserve System. The Federal Reserve System
Monetary Policy Agenda Introduction to Monetary Policy.. Created by an Act of Congress. on December 23, 1913. The nation s central bank. How the Federal Reserve Really Controls the Money Supply. The Fractional
Money, Banking and the Federal Reserve System. Chapter 10
Money, Banking and the Federal Reserve System Chapter 10 Changes for the last few weeks For the next two weeks we will be doing about a chapter a day so we need to pick up the pace a little bit. You will
If G increases from 100 to 200 (an increase of 100) then Y will increase by 200.
ECON 201: Principle of Macroeconomics Name: Fall 2004 Bellas Second Midterm You have two hours and thirty minutes to complete this exam. Answer all questions, explain your answers, label axes and curves
The Monetary System. Sherif Khalifa. Sherif Khalifa () The Monetary System 1 / 33
The Monetary System Sherif Khalifa Sherif Khalifa () The Monetary System 1 / 33 Money is the set of assets in an economy that people use to buy goods and services from other people. Money is the stock
The Monetary System. Sherif Khalifa. Sherif Khalifa () The Monetary System 1 / 32
The Monetary System Sherif Khalifa Sherif Khalifa () The Monetary System 1 / 32 Money is the set of assets in an economy that people use to buy goods and services. Money is the stock of assets that can
The Monetary System P R I N C I P L E S O F. N. Gregory Mankiw. What Money Is and Why It s Important
C H A P T E R 29 The Monetary System P R I N C I P L E S O F Economics N. Gregory Mankiw What Money Is and Why It s Important Without money, trade would require barter, the exchange of one good or service
Econ 202 Homework 5 Monetary Policy - 25 Points
1. Money serves all following economic functions EXCEPT: a. a source of economic wealth. b. a method of exchange. c. a standard of value. d. a store of value. 2. The term liquidity refers to a. the ability
Economics Principles of Macroeconomics Spring 2013
Economics 132.02 Principles of Macroeconomics Spring 2013 Professor Peter Ireland Final Exam This exam has nine questions on five pages; before you begin, please check to make sure your copy has all nine
The Monetary System CHAPTER. Goals. Outcomes
CHAPTER 29 The Monetary System Goals in this chapter you will Consider what money is and what functions money has in the economy Learn what the Federal Reserve System is Examine how the banking system
Introduction. Learning Objectives. Chapter 16. Money Creation, the Demand for Money, and Monetary Policy
Chapter 16 Money Creation, the Demand for Money, and Monetary Policy Introduction Commercial banks constitute more than 85% of all depository institutions. Commercial banks also issue more than 90% of
How does the government stabilize the economy?
How does the government stabilize the economy? The government has two different tool boxes it can use: 1. Fiscal Policy- Actions by Congress and the president to adjust to the G in aggregate demand. 2.
Macro Problem Set 3 Fall 2015
Macro Problem Set 3 Fall 2015 Directions: The True/False and Multiple Choice questions do not have to be turned in for credit. It would be foolish, however, not to spend a great deal of time working on
Monetary Policy Tools?
EQ: What is the Federal Reserve System? In the U.S., the Federal Reserve System was established in 1913 to discharge the function of a central bank and provide a strengthened framework of regulatory control
$300 billion $900 billion $20 billion $500 billion $200 billion $90 billion $0
1. When an asset is general! y accepted as a means of payment for goods and services: a. it must be backed by a specific commodity, such as gold or silver. b. it is also one of the best stores of wealth.
ECO 100Y INTRODUCTION TO ECONOMICS
Prof. Gustavo Indart Department of Economics University of Toronto ECO 100Y INTRODUCTION TO ECONOMICS Lecture 15. MONEY, BANKING, AND PRICES 15.1 WHAT IS MONEY? 15.1.1 Classical and Modern Views For the
Monetary Policy CHAPTER 31. Will Rogers. There have been three great inventions since the beginning of time: fire, the wheel and central banking.
CHAPTER 31 Monetary Policy There have been three great inventions since the beginning of time: fire, the wheel and central banking. Will Rogers McGraw-Hill/Irwin Copyright 2010 by the McGraw-Hill Companies,
EQ: What is Monetary Policy? EQ: What is the Money Supply? EQ: What is a Required Reserve? EQ: What is a Required Reserve?
EQ: What is Monetary Policy? Monetary Policy is the branch of economic policy which: Attempts to achieve economic goals: Economic growth Full employment Price level stability Through manipulation of the
Macro Problem Set 3 Fall 2017
Macro Problem Set 3 Fall 2017 Directions: Choose the single best answer for each question. Answers should be turned in on the Scantron form at the beginning of class. True=A/False=B 15 points 1) Savings
5. Consider the T-account for Cambridge Mutual Savings Bank below. Which of the following transactions is recorded on this T-account?
PART I MULTIPLE CHOICE (50 points, 2 points each) - Clearly mark the best answer. 1. Banks use restrictive covenants to limit the problem of a) Adverse selection b) Compensating balances c) Excessive volatility
Macro Federal Reserve Highlights WCC
Macro Federal Reserve Highlights WCC Federal Reserve ystem Established in 1913 Central bank of the United tates (really our third) Bank of England, Bundesbank Roles of a central bank Control the size of
Basic Finance. The Federal Reserve. An introduction to financial institutions, investments & Management Eleventh Edition.
Basic Finance The Federal Reserve 5 An introduction to financial institutions, investments & Management Eleventh Edition 1 U.S. Treasury Federal Reserve 2 Economy 3 U.S. Treasury Prints money IRS...collects
Class 5. The IS-LM model and Aggregate Demand
Class 5. The IS-LM model and Aggregate Demand 1. Use the Keynesian cross to predict the impact of: a) An increase in government purchases. b) An increase in taxes. c) An equal increase in government purchases
Lecture 6. The Monetary System Prof. Samuel Moon Jung 1
Lecture 6. The Monetary System Prof. Samuel Moon Jung 1 Main concepts: The meaning of money, the Federal Reserve System, banks and money supply, the Fed s tools of monetary control Introduction In the
Fall 2013 Unit 3 - MACROECONOMIC POLICY
Chapters 10 and 13 - Fiscal Policy Fall 2013 Unit 3 - MACROECONOMIC POLICY Reading Assignments: o Chapter 10: ALL o Chapter 13: ALL o PLUS Review Ch. 18 pp. 374-378 "Taxation and Aggregate Supply" Study
Interest Rates and Monetary Policy
33 IN THIS CHAPTER YOU WILL LEARN: 1 How the equilibrium interest rate is determined in the market for money. 2 The goals and tools of monetary policy. 3 About the Federal funds rate and how the Fed controls
Introduction. Learning Objectives. Learning Objectives. Economics Today Twelfth Edition. Chapter 15 Money Creation and Deposit Insurance
Roger LeRoy Miller Economics Today Twelfth Edition Chapter 15 Money Creation and Deposit Insurance Introduction A quick response by the Federal Reserve to the September 11, 2001 terrorist attacks stabilized
Unit 3 - MACROECONOMIC POLICY
Unit 3 - MACROECONOMIC POLICY Chapters 10 and 13 - Fiscal Policy Reading Assignments: o ALL of chapter 10 o ALL of chapter 13 o PLUS pp. 367-368 "Taxation and Aggregate Supply" Study Guide o Chapter 10:
The Monetary System: What It Is and How It Works
4 The Monetary System: What It Is and How It Works CHAPTER 5 Inflation Modified by Ming Yi 2016 Worth Publishers, all rights reserved 3 IN THIS CHAPTER, YOU WILL LEARN: The definition, functions, and types
Money Creation. The process by which banks create money is so simple that the mind is repelled. John Kenneth Galbraith My favorite economist
The Fractional Reserve System Money Creation 13 The process by which banks create money is so simple that the mind is repelled. John Kenneth Galbraith My favorite economist Monetary Multiplier Last Word
12/03/2012. What is Money?
Money has taken many forms. What is money today? What happens when the bank lends the money we re deposited to someone else? How does the Bank of Canada influence the quantity of money? What happens when
16-1: THE FEDERAL RESERVE SYSTEM
16-1: THE FEDERAL RESERVE SYSTEM Learning Objective 1. I will demonstrate my understanding of the role of the Federal Reserve, our nation s central bank. What is the Federal Reserve System? It is the central
17.1 How Banks Work 17.2 Monetary Policy in the Short Run 17.3 Monetary Policy in the Long Run
CHAPTER 17 Money Creation, the Federal Reserve System, and Monetary Policy 17.1 How Banks Work 17.2 Monetary Policy in the Short Run 17.3 Monetary Policy in the Long Run 1 CONTEMPORARY ECONOMICS: LESSON
2. Suppose a family s annual disposable income is $8000 of which it saves $2000. (a) What is their APC?
REVIEW Chapters 10 and 13 Fiscal Policy 1. Complete the following table assuming that (a) MPS = 1/5, (b) there is no government and (c) all saving is personal saving. Level of output and income Consumption
Money and the Banking System. 1 of of 28. As long as there has been paper money, there have been counterfeiters.
1 of 28 2 of 28 As long as there has been paper money, there have been counterfeiters. P R E P A R E D B Y FERNANDO QUIJANO, YVONN QUIJANO, AND XIAO XUAN XU 3 of 28 1 A P P L Y I N G T H E C O N C E P
3. Explain what the APS tells us about people s spending and saving habits.
National Income and Price Determination Reading Guide Chapters 9, 10 and 11 Chapter 9: Building the Aggregate Expenditures Model Objective... 1. Explain how the consumption schedule helps us find equilibrium
Economics Unit 3 Summary
SSEMA1 Illustrate the means by which economic activity is measured. Economic activity derives from the sectors of the economy explored in the fundamentals and microeconomics units. Individuals, businesses,
MONEY, BANKS, AND THE FEDERAL RESERVE*
Chapter 10 MONEY, BANKS, AND THE FEDERAL RESERVE* What Is Money? Topic: What Is Money? * 1) The functions of money are A) medium of exchange and the ability to buy goods and services. B) medium of exchange,
UNITS 12-13: FIXING AN ECONOMY: FISCAL & MONETARY POLICY WORKSHEET USE THE LECTURE NOTES TO ANSWER THE FOLLOWING QUESTIONS (10 pts each)
DUE DATE: NAME: UNITS 12-13: FIXING AN ECONOMY: FISCAL & MONETARY POLICY WORKSHEET USE THE LECTURE NOTES TO ANSWER THE FOLLOWING QUESTIONS (10 pts each) 1. John Keynes suggested that government should
Chapter 29: The Monetary System Principles of Economics, 8 th Edition N. Gregory Mankiw Page 1
Page 1 1. Introduction a. This is a fairly descriptive chapter, but it contains some important material for understanding the world that we live in. b. Money is important for facilitating trade. c. Paper
SV151, Principles of Economics K. Christ 6 9 February 2012
SV151, Principles of Economics K. Christ 6 9 February 2012 SV151, Principles of Economics K. Christ 9 February 2012 Key terms / chapter 21: Medium of exchange Unit of account Store of value Liquidity Commodity
Understanding the American Federal Reserve
Understanding the American Federal Reserve The Federal Reserve headquarters is in Washington, DC. The basic structure of the Federal Reserve System includes: The Federal Reserve Board of Governors The
Chapter 16: The Federal Reserve and Monetary Policy Section 2
Chapter 16: The Federal Reserve and Monetary Policy Section 2 Objectives 1. Describe how the Federal Reserve serves the federal government. 2. Explain how the Federal Reserve serves banks. 3. Describe
Monetary Policy Tools 16.3
Monetary Policy Tools 16.3 What is the process of money creation? What three tools does the Federal Reserve use to change the money supply? Why are some tools of monetary policy favored over others? Money
Cosumnes River College Principles of Macroeconomics Problem Set 5 Due March 27, 2017
Spring 2017 Cosumnes River College Principles of Macroeconomics Problem Set 5 Due March 27, 2017 Name: Prof. Dowell Instructions: Write the answers clearly and concisely on these sheets in the spaces provided.
Chapter Seventeen. Understand 10/24/2017. The Central Bank Balance Sheet and the Money Supply Process Chapter 17
Chapter Seventeen The Central Bank Balance Sheet and the Money Supply Process Chapter 17 Understand 1. The central bank s balance sheet. 2. Changing the size and the mix of the balance sheet. 3. The deposit
The Money Supply Process Hubbard, Chap Understand the roles of the Fed, banks, and households in the money supply process.
The Money Supply Process Hubbard, Chap 17. Key Points 1. Understand the roles of the Fed, banks, and households in the money supply process. 2. Definition of the monetary base. 3. U.S. banking system is
國立高雄第一科技大學管理學院暨財金學院 學年度第 2 學期經濟學期末會考題目卷 ( A )
國立高雄第一科技大學管理學院暨財金學院 1 0 5 學年度第 2 學期經濟學期末會考題目卷 ( A ) 1. Which of the following is a function of money? A. a unit of account B. a store of value C. medium of exchange D. All of the above are correct. 2.
Introduction. Learning Objectives. Chapter 16. Money Creation, the Demand for Money, and Monetary Policy
Copyright 2011 by Pearson Education, Inc. Chapter 16 Money Creation, the Demand for Money, and Monetary Policy All rights reserved. Introduction Prior to October 2008, U.S. banks typically held about $2
The Influence of Monetary and Fiscal Policy on Aggregate Demand P R I N C I P L E S O F. N. Gregory Mankiw. Introduction
C H A P T E R 34 The Influence of Monetary and Fiscal Policy on Aggregate Demand P R I N C I P L E S O F Economics N. Gregory Mankiw Introduction This chapter focuses on the short-run effects of fiscal
The Influence of Monetary and Fiscal Policy on Aggregate Demand. Lecture
The Influence of Monetary and Fiscal Policy on Aggregate Demand Lecture 10 28.4.2015 Previous Lecture Short Run Economic Fluctuations Short Run vs. Long Run The classical dichotomy and monetary neutrality
Interest Rates and Monetary Policy
33 Interest Rates and Monetary Policy McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Agenda Mon 4/4 Comparative Advantage Team Teaching: CH 33 (Tues) P3: Dulce,
The Influence of Monetary and Fiscal Policy on Aggregate Demand
The Influence of Monetary and Fiscal Policy on Aggregate Demand 34 Aggregate Demand Many factors influence aggregate demand besides monetary and fiscal policy. In particular, desired spending by households
the Federal Reserve System
CHAPTER 13 Money, Banks, and the Federal Reserve System Chapter Summary and Learning Objectives 13.1 What Is Money, and Why Do We Need It? (pages 422 425) Define money and discuss its four functions. A
a) Write down the output (RGDP) and price level of the Wonderland economy in 2010.
Sample Questions for the New Topics 1) In 2009 Wonderland economy was prospering at full employment with high level of consumer confidence. The economy s output level was $12 billion (measured as real
ECON 2301 TEST 3 Study Guide. Spring 2013
ECON 2301 TEST 3 Study Guide Spring 2013 Instructions: 33 multiple-choice questions, each with 4 responses Students need to bring: (1) Sanddollar ID card; (2) scantron Form 882-E; (3) pencil; (4) calculator
MONEY, THE PRICE LEVEL, AND INFLATION
24 MONEY, THE PRICE LEVEL, AND INFLATION After studying this chapter, you will be able to: Define money and describe its functions Explain the economic functions of banks Describe the structure and functions
the Federal Reserve System
CHAPTER 14 Money, Banks, and the Federal Reserve System Chapter Summary and Learning Objectives 14.1 What Is Money, and Why Do We Need It? (pages 456 459) Define money and discuss the four functions of
Money and the Banking System
12 Money and the Banking System [Money] is a machine for doing quickly and commodiously what would be done, though less quickly and commodiously, without it. JOHN STUART MILL Contents The Nature of Money
The Federal Reserve and Open Market Operations PRINCIPLES OF ECONOMICS (ECON 210) BEN VAN KAMMEN, PHD
The Federal Reserve and Open Market Operations PRINCIPLES OF ECONOMICS (ECON 210) BEN VAN KAMMEN, PHD What is the Federal Reserve System? The Federal Reserve: Creates money (widely accepted means of payment:
Name Date Per Part 1: Aggregate Demand
Name Date Per Part 1: Aggregate Demand 1. Aggregate means. When we use aggregates, we combine. Aggregate Demand is all the goods and services ( ) that buyers are willing and able to purchase at different
ECON 3010 Intermediate Macroeconomics. Chapter 4 The Monetary System: What It Is and How It Works
ECON 3010 Intermediate Macroeconomics Chapter 4 The Monetary System: What It Is and How It Works Money: Definition Money is the stock of assets that can be readily used to make transactions. Money: Functions
3.1 Mathematic of Finance: Simple Interest
3.1 Mathematic of Finance: Simple Interest Introduction Part I This chapter deals with Simple Interest, and teaches students how to calculate simple interest on investments and loans. The Simple Interest
Macroeconomics LESSON 4 ACTIVITY 38
Macroeconomics LESSON 4 ACTIVITY 38 The Federal Reserve: The Mechanics of Monetary Policy To manage the money supply, the Federal Reserve uses the tools of monetary policy to influence the quantity of
Eco202 Review, April 2011, Prof. Bill Even. I. Introduction. A. The causes of the great recession B. Government responses to great recession
Eco202 Review, April 2011, Prof. Bill Even I. Introduction. A. The causes of the great recession B. Government responses to great recession II. III. Chapter 4: Measuring GDP and Economic Growth A. Definition
ECO202: PRINCIPLES OF MACROECONOMICS SECOND MIDTERM EXAM Summer Prof. Bill Even FORM 1. Directions
ECO202: PRINCIPLES OF MACROECONOMICS SECOND MIDTERM EXAM Summer 2014 Prof. Bill Even FORM 1 Directions 1. Fill in your scantron with your unique id and form number. Doing this properly is worth the equivalent
Discussion Handout 7 7/12/2016 TA: Anton Babkin
Aggregate Supply and Demand: Summary The Aggregate Demand Curve The aggregate demand curve (AD) shows the relationship between the aggregate price level and the quantity of aggregate output demanded by
27 MONETARY TOOLS OVERVIEW
27 MONETARY TOOLS OVERVIEW 1. The Federal Reserve System is the central bank of the. United States. It was established to bring stability to the banking system and to provide a method to control the money
EC202 Macroeconomics
EC202 Macroeconomics Koç University, Summer 2014 by Arhan Ertan Study Questions - 3 1. Suppose a government is able to permanently reduce its budget deficit. Use the Solow growth model of Chapter 9 to
The Money Market. A.P. Economics Unit 4: Financial Sector. Ms. Trimels
The Money Market A.P. Economics Unit 4: Financial Sector Ms. Trimels The Money Supply (Sm) A nation s money supply: the amount of money available to households and firms at any particular time. It measures
In this chapter, look for the answers to these questions
In this chapter, look for the answers to these questions How does the interest-rate effect help explain the slope of the aggregate-demand curve? How can the central bank use monetary policy to shift the
CHAPTER 31 Money, Banking, and Financial Institutions
CHAPTER 31 Money, Banking, and Financial Institutions Answers to Short-Answer, Essays, and Problems 1. What is money? Explain in terms of the functions of money. Money is whatever performs the three basic
Economics 102 Discussion Handout Week 13 Fall Introduction to Keynesian Model: Income and Expenditure. The Consumption Function
Economics 102 Discussion Handout Week 13 Fall 2017 Introduction to Keynesian Model: Income and Expenditure The Consumption Function The consumption function is an equation which describes how a household
The Influence of Monetary and Fiscal Policy on Aggregate Demand
The Influence of Monetary and Fiscal Policy on Aggregate Demand Chapter 34 Copyright 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be
The Federal Reserve System and Open Market Operations
Chapter 15 MODERN PRINCIPLES OF ECONOMICS Third Edition The Federal Reserve System and Open Market Operations Outline What Is the Federal Reserve System? The U.S. Money Supplies Fractional Reserve Banking,
The Federal Reserve and Central Banking
ACTIVITY 4-6 eral Reserve and Central Banking eral Reserve System is the central bank of the United States. A central bank is an institution that oversees and regulates the banking system and controls
Lesson 12 The Influence of Monetary and Fiscal Policy on Aggregate Demand
Lesson 12 The Influence of Monetary and Fiscal Policy on Aggregate Demand Henan University of Technology Sino-British College Transfer Abroad Undergraduate Programme 0 In this lesson, look for the answers