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Ch 15: Understanding the Federal Reserve System

About This Chapter

Enhance your understanding of the functions of the federal reserve system using the brief lessons found in this chapter. Refer to this material when studying for class, credit-granting or other exams.

Understanding the Federal Reserve System - Chapter Summary

What is monetary policy? The money market? The Federal Reserve Act of 1913? These are just a few of the questions you can expect to have answered when you use this resource. You'll gain insight into money supply and demand curves, the fractional reserve system, bond yields and more. Each lesson provides key term definitions and detailed examples, using an effective video format. The lessons can be accessed 24/7 from any device and can be viewed as often as necessary to obtain a full understanding of all concepts. Short self-assessment quizzes are helpful tools you can use to determine how much you have learned and whether you need any further review. Once you complete this chapter, you should be able to:

  • Discuss the Federal Reserve Act of 1913
  • Describe required and excess reserves in banking
  • Explain details about required reserves, open market operations and the discount rate
  • Understand causes of changes in bond yields
  • Provide details about the money market
  • Detail the impact of the federal reserve on the money supply
  • Describe how the federal reserve uses monetary policy

7 Lessons in Chapter 15: Understanding the Federal Reserve System
Test your knowledge with a 30-question chapter practice test
The Federal Reserve Act of 1913: Definition & Overview

1. The Federal Reserve Act of 1913: Definition & Overview

The Federal Reserve Act of 1913 was one of the most important Congressional Acts of the 20th Century. In this lesson, you'll learn about the act and the central banking system it created. A short quiz follows.

Fractional Reserve System: Required and Excess Reserves

2. 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.

Reserve Requirement, Open Market Operations and the Discount Rate

3. 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.

Determinants of Bond Yields

4. Determinants of Bond Yields

While bonds are sold with a stated interest rate, there is more to the return than just the coupon rate. Let's look at what bond yields are along with what causes the yield to change and how a yield curve aids in bond investment evaluation.

The Money Market: Money Supply and Money Demand Curves

5. 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.

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.

Monetary Policy & The Federal Reserve System

7. Monetary Policy & The Federal Reserve System

This lesson covers the Federal Reserve System's use of monetary policy to help promote the economy. A short quiz will follow the lesson to check your understanding.

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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