Label next blank page The Federal Reserve On a post-it write the standard and goals: STANDARD: SSEMA2a-c GOALS: 1)I will be able to describe how the Federal Reserve is organized. 2) I will be able to explain the tools used by the Fed to regulate money supply. 3) I will be able to explain and evaluate the role of monetary policy and the Fed.

The Fed was created by Congress in 1913. THE FEDERAL RESERVE Post-it w/ Standards & goals The Fed…defined The Fed… Defined! What is the Federal Reserve? Roles, goals or purpose of The Fed The Fed was created by Congress in 1913. -central bank of the US - An independent organization created by Congress to keep our money valuable and our financial system healthy Words to Know Structure Of The Fed - 1 of 3 federal bank regulatory agencies in the US The Fed’s Toolbox - Guardian of payments system efficiency & effectiveness 44

Why was the Fed created? Role/Goal/Purpose: THE FEDERAL RESERVE Post-it w/ Standards & goals Why was the Fed created? The Fed… Defined! Role/Goal/Purpose: Roles, goals or purpose of The Fed 1) To make sure there’s enough money & credit available to sustain economic growth, full employment without inflation 2) supervise/regulate banking institutions Words to Know 3) Maintain the payments system Structure Of The Fed 4) Preparing consumer legislation 5) Maintain money supply (printing & destroying of coins/currency) The Fed’s Toolbox 6) Acting as government’s bank 44

How’s the Fed organized/structured? THE FEDERAL RESERVE Post-it w/ Standards & goals How’s the Fed organized/structured? The Fed… Defined! Open textbook to page 400 and copy Figure 14.3 into this folder. You have 7 minutes. Roles, goals or purpose of The Fed Words to Know Structure Of The Fed The Fed’s Toolbox 44

Words to Know FDIC— Money supply— M1— M2— Interest rate— THE FEDERAL RESERVE Post-it w/ Standards & goals Words to Know The Fed… Defined! FDIC— Money supply— M1— M2— Interest rate— Roles, goals or purpose of The Fed Words to Know Structure Of The Fed The Fed’s Toolbox 44

The Fed’s Toolbox Open market operations — Discount rate— THE FEDERAL RESERVE Post-it w/ Standards & goals The Fed’s Toolbox The Fed… Defined! Open market operations — buying & selling of government securities in financial markets Discount rate— Interest rate that the Fed charges on loans to the nation’s financial instiutions Reserve requirement— Amount of deposit that a bank/financial institution required to keep on hand Roles, goals or purpose of The Fed Words to Know Structure Of The Fed The Fed’s Toolbox 44

Label the top of the next page: Monetary Policy (& the Fed) Actions used by the Fed (FOMC) to expand (increase) or contract (decrease) the money supply What is MONETARY POLICY? Actions used by the Fed (FOMC) to expand (increase) or contract (decrease) the money supply 44 45