Ch 12: Central Bank and the Money Supply: Homeschool Curriculum

About This Chapter

The Central Bank and the Money Supply unit of this Macroeconomics Homeschool course is designed to help homeschooled students learn about the responsibilities of the central bank in terms of monetary circulation. Parents can use the short videos to introduce topics, break up lessons and keep students engaged.

Who's it for?

This unit of our Macroeconomics Homeschool course will benefit any student who is trying to learn about well-known definitions and tools that pertain to the central bank and the money supply. There is no faster or easier way to learn about economics. Among those who would benefit are:

  • Students who require an efficient, self-paced course of study to learn about open market operations, the reserve ratio, the discount rate, the equation of exchange and the Federal Reserve.
  • Homeschool parents looking to spend less time preparing lessons and more time teaching.
  • Homeschool parents who need an economics curriculum that appeals to multiple learning types (visual or auditory).
  • Gifted students and students with learning differences.

How it works:

  • Students watch a short, fun video lesson that covers a specific unit topic.
  • Students and parents can refer to the video transcripts to reinforce learning.
  • Short quizzes and a central bank and the money supply unit exam confirm understanding or identify any topics that require review.

Central Bank and the Money Supply Unit Objectives:

  • Describe the Federal Reserve system and its powers.
  • Explain reserve requirement and open market operations.
  • Learn about the Federal Open Market Committee.
  • Discuss the reserve ratio.
  • Explain the discount rate as a major tool of monetary policy.
  • Learn about the ways in which the Federal Reserve controls interest rates and stabilizes prices.
  • Explore money theories and the equation of exchange.
  • Learn about the velocity of money and monetary policy.
  • Compare nominal and real interest rates.
  • Define private investments and the purpose of loanable funds.
  • Examine the effects of hyperinflation.

11 Lessons in Chapter 12: Central Bank and the Money Supply: Homeschool Curriculum
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.

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

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Support