Copyright

Ch 8: CSET Business - Macroeconomics: Money, Federal Reserve System & Banking

About This Chapter

Let us expand your knowledge of money, the Federal Reserve System and banking. The video lessons and self-assessment quizzes in this chapter can prepare you to answer questions about macroeconomics on the CSET Business Subtest II.

CSET Business - Macroeconomics: Money, Federal Reserve System & Banking: Chapter Summary

Learn about the three types of money - commodity money, representative money and fiat money - and their four basic functions through our chapter on money, the Federal Reserve System and banking. This series of video lessons can help you prepare for the California Subject Examinations for Teachers (CSET) Business Subtest II. Additional subjects addressed in this chapter include the following:

  • Money supply and market demand curves
  • The multiplier effect and the simple spending multiplier
  • The Federal Reserve System
  • Fractional reserve banking
  • Reserve requirement, open market operations and the discount rate
  • Money demand and interest rates
  • Quantity theory of money

CSET Business - Macroeconomics: Money, Federal Reserve System & Banking Objectives

Men and women who want to work as high school business teachers in California public schools must earn their credentials through the state's Commission on Teacher Credentialing. Part of this process includes passing the CSET Business Single Subject Exam, which features the CSET Business Subtest II. This subtest comprises 40 multiple-choice questions - 15 of which are economics-focused - and two constructed-response questions.

You might begin exploring this chapter on money, the Federal Reserve System and banking by taking the self-assessment quizzes associated with each lesson. This can give you an idea of where your skills are strong - and where you could use a little help. Then, watch the videos and take the quizzes a second time to see if you can improve your scores.

11 Lessons in Chapter 8: CSET Business - Macroeconomics: Money, Federal Reserve System & Banking
Test your knowledge with a 30-question chapter practice test
What is Money? - Definition and Types

1. What is Money? - Definition and Types

In this lesson, you'll learn what money is and its four basic functions. You'll also take a look at how it benefits society and explore the different types of money.

The Four Basic Functions of Money

2. The Four Basic Functions of Money

This lesson uses real-world examples to describe the four basic functions that money serves in an economy. These basic functions help to create the foundation of the money system.

The Money Market: Money Supply and Money Demand Curves

3. The Money Market: Money Supply and Money Demand Curves

This lesson explores an economic model describing the supply and demand for money in a nation, referred to as the money market. It also describes the central bank's role in controlling the money supply, which impacts interest rates and the greater economy.

The Multiplier Effect and the Simple Spending Multiplier: Definition and Examples

4. The Multiplier Effect and the Simple Spending Multiplier: Definition and Examples

When money is spent in an economy, this spending results in a multiplied effect on economic output. This lesson explains the multiplier effect and the how to use the simple spending multiplier to calculate it.

What is the Federal Reserve System?

5. 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.

Fractional Reserve System: Required and Excess Reserves

6. Fractional Reserve System: Required and Excess Reserves

This lesson provides an overview of basic banking concepts, illustrating how deposits turn into required reserves and excess reserves. It also covers how a bank accounts for these items on its balance sheet.

How Money Is Made: Understanding Bank Lending in the Economy

7. How Money Is Made: Understanding Bank Lending in the Economy

In this lesson, you'll learn how a single deposit in a local bank increases the money supply and filters through the economy with the help of the fractional reserve banking system.

Reserve Requirement, Open Market Operations and the Discount Rate

8. 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.

Money Demand and Interest Rates: Economics of Demand

9. Money Demand and Interest Rates: Economics of Demand

Learn about the differences between money, wealth and income and explore the factors that determine the demand for money in an economy. Take a look at the demand curve for money as well.

Quantity Theory of Money: Output and Prices

10. 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.

Money and Multiplier Effect: Formula and Reserve Ratio

11. Money and Multiplier Effect: Formula and Reserve Ratio

In this lesson, explore the concept of the multiplier effect and the money multiplier. Then, learn the formula for calculating changes in 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 160 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