About This Chapter
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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Other chapters within the MTTC History (009): Practice & Study Guide course
- MTTC History: Historical Research
- MTTC History: Tools for the Classroom
- MTTC History: The Stone Age
- MTTC History: The Bronze & Iron Ages
- MTTC History: Ancient Civilizations
- MTTC History: Ancient Middle East & India
- MTTC History: Early China & Japan
- MTTC History: Foundations of Religion
- MTTC History: Hinduism
- MTTC History: Buddhism
- MTTC History: Confucianism
- MTTC History: Judaism
- MTTC History: Christianity
- MTTC History: Islam
- MTTC History: Classical Greece
- MTTC History: The Roman Republic & The Roman Empire
- MTTC History: Government & Culture in the Middle Ages
- MTTC History: War, Revolution & Culture in France & England
- MTTC History: European Renaissance & Reformation
- MTTC History: African Cultures Before European Colonization
- MTTC History: Exploration & Colonization of the Americas
- MTTC History: Revolution & War in the Americas
- MTTC History: Revolution & Independence in Europe
- MTTC History: The Industrial Revolution & Enlightenment
- MTTC History: Germany During the World Wars
- MTTC History: The World Wars
- MTTC History: The Cold War
- MTTC History: Pre-Columbian North America
- MTTC History: Early North American Settlements
- MTTC History: Road to the American Revolution
- MTTC History: The American Revolution
- MTTC History: Ratification of the U.S. Constitution
- MTTC History: The Virginia Dynasty
- MTTC History: Jacksonian Democracy
- MTTC History: Manifest Destiny
- MTTC History: The American Civil War
- MTTC History: American Reconstruction
- MTTC History: Industrialization & Urbanization in the U.S.
- MTTC History: The Progressive Era
- MTTC History: American Imperialism
- MTTC History: The Roaring 20s in the U.S.
- MTTC History: The Great Depression in the U.S.
- MTTC History: World War II
- MTTC History: The Cold War & U.S. Politics
- MTTC History: Protests, Activism & Civil Rights
- MTTC History: America in the 1970s
- MTTC History: Contemporary American Presidents
- MTTC History: Introduction to Geography
- MTTC History: Spatial Processes
- MTTC History: Geography Tools
- MTTC History: The Dispersal of Humans & Culture
- MTTC History: Human Settlement Patterns
- MTTC History: Population & the Environment
- MTTC History: Ethnicity & Geography
- MTTC History: Geography of Languages, Religions & Material Culture
- MTTC History: Basics of Political Science
- MTTC History: American Government Overview
- MTTC History: Constitutional Democracy in the U.S.
- MTTC History: Federalism in the U.S.
- MTTC History: Political Ideologies & Philosophy
- MTTC History: American Political Culture, Opinion & Behavior
- MTTC History: Civil Liberties in the U.S.
- MTTC History: Civil Rights in the U.S.
- MTTC History: U.S. Political Parties
- MTTC History: U.S. Electoral Systems
- MTTC History: Interest Groups & American Democracy
- MTTC History: Federal Bureaucracy in the U.S.
- MTTC History: Types of Legislatures in Government
- MTTC History: The American Presidency
- MTTC History: The American Congress
- MTTC History: The Federal Judicial System
- MTTC History: Introduction to Economics
- MTTC History: Scarcity, Choice & the Production Possibilities Curve
- MTTC History: Demand, Supply & Market Equilibrium
- MTTC History: Aggregate Demand & Supply
- MTTC History: Measuring the Economy
- MTTC History: Federal Government & the American Economy
- MTTC History: Inflation Measurement & Adjustment
- MTTC History: Understanding Unemployment
- MTTC History: Inflation & Unemployment
- MTTC History: Macroeconomic Equilibrium
- MTTC History: Money, Banking & Financial Markets
- MTTC History: Fiscal & Monetary Policies
- MTTC History: Foreign Exchange & the Balance of Payments
- MTTC History: Democratic Values & Society
- MTTC History Flashcards