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Ch 45: WEST Business & Marketing Education: Central Bank & Monetary Policy

About This Chapter

Use these videos to study the major components of the central bank, Federal Reserve and monetary policy. These short videos lessons and quizzes can help you prepare for WEST Business & Marketing Education exam.

WEST Business & Marketing Education: Central Bank & Monetary Policy - Chapter Summary

Examine the basic principles of monetary policy in relation to business and marketing in preparation for the WEST Business & Marketing Education exam. The video lessons in this chapter include definitions and examples of open market operations, how the reserve ratio affects the money supply and the velocity of money. Specifically, these videos cover the following topics:

  • The Federal Reserve System
  • Reserve requirements and ratio
  • Open Market operations
  • The discount rate
  • Money supply and interest rates
  • Quantity Theory of Money
  • The velocity of money
  • Types of interest rates
  • Hyperinflation
  • The consumer price index

Watch these short video lessons to refresh your knowledge of the central bank and interest rates before testing your knowledge with the supplemental multiple-choice quizzes. You can also use the text transcripts to quickly review key terms or go over any concepts that you were unclear on.

WEST Business & Marketing Education: Central Bank & Monetary Policy Objectives

The WEST Business & Marketing Education exam is just one of the certification tests used in Washington State to assess the skills of prospective teachers; this exam is specifically for those who desire a credential to teach business and/or marketing. It is a computer-based test with 110 multiple-choice questions. You'll have two hours and 30 minutes to complete the test.

The exam covers multiple topics related to business and marketing, including management, economics, accounting, sales and information technology. The topics in this chapter are covered within the economics and international business domain area; this content makes up 17% of the total test. Specifically, these lessons can prepare you for questions on analyzing monetary and fiscal policies, the role of the Federal Reserve and central bank in setting policies, and how these policies affect the economy. You can also use the chapter exam to practice taking questions that are similar in format to those you will find on the actual test.

11 Lessons in Chapter 45: WEST Business & Marketing Education: Central Bank & Monetary Policy
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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Other Chapters

Other chapters within the WEST Business & Marketing Education (038): Practice & Study Guide course

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