Beruflich Dokumente
Kultur Dokumente
Chapter 14:
The Federal Reserve
System
McGraw-Hill/Irwin
Learning Objectives
14-01. Describe how the Federal
Reserve is organized.
14-02. Identify the Feds major policy
tools.
14-03. Explain how open market
operations work.
14-3
Clearing checks.
Holding bank reserves.
Providing currency.
Providing loans.
14-4
Monetary Tools
The Fed controls the money supply
by using three policy tools:
Reserve requirements.
Discount rates.
Open market operations.
14-7
Reserve Requirements
Private banks are required to keep a
fraction of deposits in reserve,
either as cash or on deposit at the
regional Fed bank.
By changing reserve requirements,
the Fed can directly alter the lending
capacity of the banking system.
14-8
Reserve Requirements
Available lending capacity = Excess reserves x Money multiplier
14-12
14-13
14-16
14-18
14-19