About This Chapter
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
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.
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.
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.
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.
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.
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. 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.
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Other chapters within the UExcel Introduction to Macroeconomics: Study Guide & Test Prep course
- Fundamental Concepts of Macroeconomics
- Government Failure in Macroeconomics
- Demand, Supply & the Economic Market
- Role of Government in Macroeconomics
- National Income Accounting Overview
- Unemployment & the Economy
- Basic Concepts of Inflation
- Measurements of Inflation
- The Business Cycle & Economics
- Aggregate Demand in Economics
- Fiscal Policy in Economics
- Budgets & National Debt
- Understanding Monetary Policy
- Fundamentals of Money
- Supply-Side Policy & Policy Comparisons
- UExcel Introduction to Macroeconomics Flashcards