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Ch 12: Central Bank and the Money Supply: Tutoring Solution

About This Chapter

The Central Bank and the Money Supply chapter of this College Macroeconomics Tutoring Solution is a flexible and affordable path to learning about the central bank and money supply. These simple and fun video lessons are each about five minutes long and they teach all of the central bank and money supply operations and theories required in a typical college macroeconomics course.

How it works:

  • Begin your assignment or other macroeconomics work.
  • Identify the central bank and money supply concepts that you're stuck on.
  • Find fun videos on the topics you need to understand.
  • Press play, watch and learn!
  • Complete the quizzes to test your understanding.
  • As needed, submit a question to one of our instructors for personalized support.

Who's it for?

This chapter of our college macroeconomics tutoring solution will benefit any student who is trying to learn about the central bank and money supply and earn better grades. This resource can help students including those who:

  • Struggle with understanding the Federal Reserve System, reserve requirements, discount rate, velocity of money, interest rates, hyperinflation or any other central bank and money supply topic
  • Have limited time for studying
  • Want a cost effective way to supplement their economics learning
  • Prefer learning economics visually
  • Find themselves failing or close to failing their central bank and the money supply unit
  • Cope with ADD or ADHD
  • Want to get ahead in macroeconomics
  • Don't have access to their economics teacher outside of class

Why it works:

  • Engaging Tutors: We make learning about the central bank and money supply simple and fun.
  • Cost Efficient: For less than 20% of the cost of a private tutor, you'll have unlimited access 24/7.
  • Consistent High Quality: Unlike a live economics tutor, these video lessons are thoroughly reviewed.
  • Convenient: Imagine a tutor as portable as your laptop, tablet or smartphone. Learn about the central bank and money supply on the go!
  • Learn at Your Pace: You can pause and rewatch lessons as often as you'd like, until you master the material.

Learning Objectives

  • Describe the purpose of the Federal Reserve System.
  • Name the three main tools used by the central bank.
  • Provide examples of open market operations.
  • Explain how the money supply is affected by the reserve ratio.
  • Understand how banks borrow money from the Federal Reserve.
  • Learn how the Federal Reserve can affect interest rates.
  • Become familiar with the quantity theory of money.
  • Explain how the velocity rate of money is determined.
  • Compare and contrast real and nominal interest rates.
  • Describe the relationship between private investment and real interest rates.
  • Learn how the money supply is connected to rapidly increasing prices.

13 Lessons in Chapter 12: Central Bank and the Money Supply: Tutoring Solution
What is the Federal Reserve System?

1. What is the Federal Reserve System?

Have you ever wondered why interest rates go up and down, seemingly at random? Of course you have! Discover what the Federal Reserve is, what its goals are and how those goals are achieved in this introductory lesson explaining the central bank of the United States.

Reserve Requirement, Open Market Operations and the Discount Rate

2. Reserve Requirement, Open Market Operations and the Discount Rate

This lesson outlines the three main tools used by the central bank to conduct monetary policy, including open market operations, required reserves and the discount rate.

Open Market Operations & the Federal Reserve: Definition & Examples

3. Open Market Operations & the Federal Reserve: Definition & Examples

This lesson explains the most frequently used monetary policy tool of the central bank, open market operations. Using examples, you'll go inside the formula of the money multiplier and see how the Federal Reserve effectively controls the interest rate of the economy.

How the Reserve Ratio Affects the Money Supply

4. How the Reserve Ratio Affects the Money Supply

Where does our supply of money come from. Well, it's in the hands of the Federal Reserve. In this lesson, discover how the central bank can dramatically alter the supply of money in the economy by changing the reserve requirements of the banks it oversees.

The Discount Rate & Monetary Policy: How Banks Can Borrow Money from the Federal Reserve

5. The Discount Rate & Monetary Policy: How Banks Can Borrow Money from the Federal Reserve

Learn more about the discount rate, which is the rate that banks pay to the central bank when borrowing money. This lesson explains how changes in the discount rate affect the money supply and how the central bank can use the discount rate as part of monetary policy.

How the Federal Reserve Changes the Money Supply and Affects Interest Rates

6. How the Federal Reserve Changes the Money Supply and Affects Interest Rates

Discover the connection between the money supply and economic output and how the central bank's tools lead to an increase or decrease in real GDP via expansionary and contractionary monetary policy.

Quantity Theory of Money: Output and Prices

7. Quantity Theory of Money: Output and Prices

This lesson explains the quantity theory of money and how to apply it, including the idea that an increase in the money supply leads to inflation in the long run.

The Velocity of Money: Definition and Circulation Speed

8. The Velocity of Money: Definition and Circulation Speed

Learn about the method economists use to measure how fast money changes hands throughout the economy, referred to as the velocity of money. With the help of an imaginative story, this lesson defines the concept of velocity as well as what determines it.

Real vs. Nominal Interest Rates and Changes in Prices

9. Real vs. Nominal Interest Rates and Changes in Prices

This lesson explains the important difference between nominal and real interest rates and provides examples of how to use the Fisher equation to adjust nominal rates for inflation.

Private Investment and Real Interest Rates

10. Private Investment and Real Interest Rates

When you borrow money, where does that money come from and why is it available? In this lesson, you'll learn about the market for loanable funds, where savers deposit money and entrepreneurs borrow money to finance private investment.

Hyperinflation, Money Supply and the Consumer Price Index

11. Hyperinflation, Money Supply and the Consumer Price Index

Is there such a thing as too much money? Maybe. What happens when inflation is excessive? This lesson explores what hyperinflation is and how it is connected with the money supply.

What is Monetary Policy? - Definition, Role & Effects

12. What is Monetary Policy? - Definition, Role & Effects

National governments have a couple of tools they can use to steer an economy. Monetary policy is one of those tools. In this lesson, you'll learn what monetary policy is and discover its role and its effects. A short quiz follows the lesson.

World Economy: Definition & History

13. World Economy: Definition & History

In this lesson we will explore the concept, history, and consequences of a world economy. We will learn why a healthy world economy is important and discuss major events that created the current world economy. The lesson will then conclude with a summary and a quiz.

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