Ch 35: The Federal Reserve System

About This Chapter

You can learn about the Federal Reserve System in the United States by reviewing the video lessons included in this chapter. Learn about the basic functions and purpose of the Federal Reserve and its significance to the American economy.

The Federal Reserve System - Chapter Summary

One of the most important but least understood aspects of the American economy is the Federal Reserve system. If you would like to learn about significant topics regarding the roles, responsibilities and significance of the Federal Reserve, you can read or watch the video lessons included in this chapter.

Each of our lesson instructors will go over the intricate functions involved in the workings of the Federal Reserve, as well as some basic economic principles needed to understand it. Our instructors have expertise in teaching these specific areas, so you should have no difficulty in following along with the lessons. Topics you will learn about include:

  • The characteristics and function of the Federal Reserve System
  • The Federal Reserve and Open Market Operations
  • The Reserve ratio and money supply
  • The discount rate and monetary policy
  • Hyperinflation
  • Financial assets
  • The value of money over time
  • Production factors
  • The four basic functions of money

If you would like to test your understanding of this subject once you complete the chapter, you can answer the questions found in the chapter's practice quizzes and final exam. The chapter also allows you to message the lesson instructors directly, should you want more information on specific points from these lessons. Your personal Dashboard can also be used to keep track of your learning progress as you go through the lessons.

11 Lessons in Chapter 35: The Federal Reserve System
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.

Hyperinflation, Money Supply and the Consumer Price Index

7. 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.

Types of Financial Assets: Money, Stocks & Bonds

8. Types of Financial Assets: Money, Stocks & Bonds

For an economy to operate effectively, consumers and businesses need a common medium of exchange and mechanisms to encourage some people to save, others to borrow and others to invest. In any modern economy, these needs are met with money, stocks and bonds.

Present and Future Value: Calculating the Time Value of Money

9. Present and Future Value: Calculating the Time Value of Money

A central concept in business and finance is the time value of money. We will use easy to follow examples and calculate the present and future value of both sums of money and annuities.

The Four Basic Functions of Money

10. 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.

Factors of Production in Economics: Definition, Importance & Examples

11. Factors of Production in Economics: Definition, Importance & Examples

In this lesson, you'll learn about factors of production in economics, including their definition, their importance, and some examples. You'll also have a chance to take a short quiz.

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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