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Ch 12: Central Bank and the Money Supply: Help and Review

About This Chapter

The Central Bank and the Money Supply chapter of this College-Level Principles of Macroeconomics Help and Review course is the simplest way to master central bank and the money supply. This chapter uses simple and fun videos that are about five minutes long, plus lesson quizzes and a chapter exam to ensure students learn the essentials of central bank and the money supply.

Who's it for?

Anyone who needs help learning or mastering college macroeconomics material will benefit from taking this course. There is no faster or easier way to learn college macroeconomics. Among those who would benefit are:

  • Students who have fallen behind in understanding the Federal Reserve system or working with the discount rate and monetary policy
  • Students who struggle with learning disabilities or learning differences, including autism and ADHD
  • Students who prefer multiple ways of learning economics (visual or auditory)
  • Students who have missed class time and need to catch up
  • Students who need an efficient way to learn about central bank and the money supply
  • Students who struggle to understand their teachers
  • Students who attend schools without extra economics learning resources

How it works:

  • Find videos in our course that cover what you need to learn or review.
  • Press play and watch the video lesson.
  • Refer to the video transcripts to reinforce your learning.
  • Test your understanding of each lesson with short quizzes.
  • Verify you're ready by completing the Central Bank and the Money Supply chapter exam.

Why it works:

  • Study Efficiently: Skip what you know, review what you don't.
  • Retain What You Learn: Engaging animations and real-life examples make topics easy to grasp.
  • Be Ready on Test Day: Use the Central Bank and the Money Supply chapter exam to be prepared.
  • Get Extra Support: Ask our subject-matter experts any central bank and money supply question. They're here to help!
  • Study With Flexibility: Watch videos on any web-ready device.

Students will review:

This chapter helps students review the concepts in a Central Bank and the Money Supply unit of a standard college-level principles of macroeconomics course. Topics covered include:

  • Open market operations and the Federal Reserve
  • How the reserve ratio affects the money supply
  • The discount rate and monetary policy
  • Quantity theory of money
  • Real vs. nominal interest rates

15 Lessons in Chapter 12: Central Bank and the Money Supply: Help and Review
Test your knowledge with a 30-question chapter practice test
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.

The Federal Open Market Committee: Definition & Members

12. The Federal Open Market Committee: Definition & Members

Setting the Fed Funds rate isn't as easy as making a statement, as it sometimes appears in the press. Behind the scenes, the Federal Open Market Committee is busy figuring out how to use the Fed's balance sheet to manage monetary policy.

What is Forbearance in Student Loans? - Definition

13. What is Forbearance in Student Loans? - Definition

This lesson will provide an overview of student loan forbearance. Student loans affect students and graduates across the country, and the forbearance option will be explored in this lesson.

Joint Probability: Definition, Formula & Examples

14. Joint Probability: Definition, Formula & Examples

Joint probability is the likelihood of two independent events happening at the same time. Joint probabilities can be calculated using a simple formula as long as the probability of each event is known. This lesson will illustrate the formula with examples.

What is Systemic Risk? - Definition & Analysis

15. What is Systemic Risk? - Definition & Analysis

In this lesson, we'll define systemic risk by first using an analogy of a group of people on a deserted island. We'll then give the formal definition for this type of risk and provide some examples.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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