Ch 83: MTTC History: Central Bank & the Money Supply

About This Chapter

Watch short videos on the central bank and money supply as part of your preparation for the MTTC History exam. Learn about the Federal Reserve System, discount rates and the consumer price index.

MTTC History: Central Bank & the Money Supply - Chapter Summary

Let our instructors refresh your knowledge of the Federal Reserve System and its role in open market operations, monetary policy and the money supply. These short videos can get you up to speed on all the central bank and money concepts you'll need to know before taking the MTTC History exam, including:

  • Monetary goals of the Federal Reserve System
  • Tools of the central bank
  • Effects of the reserve ratio on the money supply
  • Discount rates and monetary policy
  • Quantity theory of money
  • Velocity of money
  • Real and nominal interest rates
  • Private investments and their relationship with real interest rates
  • Hyperinflation and the consumer price index

Our lessons break down central bank and money supply concepts into small, easy-to-follow lessons that make preparing for the exam fun and easy. Lesson transcripts provide an alternative to watching the video as well as a quick way to identify key terms. The chapter closes with an exam that you can use to practice for the real MTTC History exam.

Objectives of the MTTC History: Central Bank & the Money Supply Chapter

Michigan uses the MTTC History exam to gauge your knowledge of history and readiness to teach history topics to students. The exam is in multiple-choice format and has four subareas, including one on interdisciplinary perspectives, which is where questions on the central bank and money supply are found. This subarea makes up about a quarter of the exam.

In addition to a chapter exam, this series of lessons also comes with self-assessment quizzes that you can use to prepare for the exam. Questions on the quizzes are in the same format as those found on the MTTC History exam.

11 Lessons in Chapter 83: MTTC History: Central Bank & the Money Supply
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

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