Functions of the Fed Chapter 12 Presentation 2. What is the (Fed)Federal Reserve? The Central Bank of America Controls the American Money Supply 7 members.

Slides:



Advertisements
Similar presentations
Economics Chapter Fourteen.
Advertisements

Federal Reserve and Macroeconomic Policy
PART SIX Money, Banking, and Monetary Policy. Chapter 15: Money and Banking Copyright © 2007 by the McGraw-Hill Companies, Inc. All rights reserved.
The Federal Reserve System and Monetary Policy
The Federal Reserve System
Bell Ringer 1.What type of financial institution offers full financial services and forms the largest part of the financial system? 2.What type of financial.
Fiscal & Monetary Policy How the Federal Government can Influence the American Economy How the Federal Government can Influence the American Economy.
The Federal Reserve The Federal Reserve is called “the lender of last resort”…what does this mean?
The Federal Reserve System
The Federal Reserve “The Fed”. The Fed The Federal Reserve is our nation’s bank Their customers are: 1.The Government 2.Banks – Wells Fargo, Bank of America.
1 Ch. 12: The Federal Reserve System James R. Russell, Ph.D., Professor of Economics & Management, Oral Roberts University ©2005 Thomson Business & Professional.
The Federal Reserve Started in 1913 is response to yet another financial crisis Is Quasi-public Serves three purposes Regulates the payment system Supervises.
The Federal Reserve System Lecture 6.7. Federal Reserve Central bank of the U.S. that controls the size of the money supply to –help regulate the economy.
The Federal Reserve System
Chapter 15: The Fed and Monetary Policy
Chapter 15 The Federal Reserve System & Monetary Policy
Copyright © 2004 South-Western 6 The Federal Reserve.
Paul Schneiderman, Ph.D., Professor of Finance & Economics, Southern New Hampshire University ©2008 South-Western.
The Federal Reserve Maier Amschel Rothschild said: "Permit me to issue and control the money of a nation and I care not who writes its laws"
Chapter 14 Money and Our Banking System. Money is whatever people generally accept Functions of Money Medium of Exchange – payment for goods and services.
How effective is monetary policy as an economic tool?
16 The Monetary System. THE MEANING OF MONEY Money is the set of assets in an economy that people regularly use to buy goods and services from other people.
 1. Medium of exchange – usable for buying and selling goods  2. Unit of account - dollar value of goods and services  3. store of value - transfer.
Mr. Nunn The Federal Reserve System. Federal Reserve System The Federal Reserve System or the Fed- is the central bank of the United States.
Chapter 11 Money and Banking. Barter Economy Coincidence of wants Cumbersome Time-consuming Indivisible.
The Federal Reserve In Action. What is the Fed?  Central bank of the United States  Established in 1913  Purpose is to ensure a stable economy for.
Chapter 14 The Federal Reserve System Functions and Tools.
Economics Chapter 15 The Federal Reserve. Section 1: Organization and Functions of the Fed Created in 1913 Made to end periodic financial panics The Fed.
Copyright 2008 The McGraw-Hill Companies 12-1 Money Defined Money Supply Federal Reserve System Financial Institutions Last Word Key Terms End Show 12.
Monetary Policy Federal Reserve & Monetary Policy.
Bellwork  On a piece of paper, make two columns, M1 and M2. Classify each of the following into the categories: Small time deposits Coins Certificates.
Economics Chapter 15 The Federal Reserve. Section 1: Organization and Functions of the Fed Created in 1913 Made to end periodic financial panics The Fed.
1 The Fed Ch The Federal Reserve and the Banking System The Fed was est. by Congress in 1913 and holds power over the money and banking system.
Money serves a purpose Money is anything accepted as final payment for goods and services It is used for Medium of exchange Unit of account Store of value.
The Fed Chapter 16. A Stronger Fed In 1935, Congress adjusted the Federal Reserve structure so that the system could respond more effectively to crises.
The Federal Reserve Board. Parts of the Fed 1. The Board of Governors 2. District Banks 3. Federal Open Market Committees 4. Federal Advisory Council.
Economics Chapter 16 The Federal Reserve & Monetary Policy.
Please turn to page 397 in the text book, read the profile on Ben Bernanke and answer the four questions. 1.What does the Federal Reserve Bank do? 2.As.
Copyright McGraw-Hill, Inc Money & Banking FUNCTIONS OF MONEY SUPPLY OF MONEY DEMAND FOR MONEY MONEY MARKET U.S. FINANCIAL SYSTEM CHAPTER THIRTEEN.
Chapter 13-4 The Federal Reserve System. The Federal Reserve  A central bank is an institution that oversees and regulates the banking system and controls.
THE FEDERAL RESERVE SYSTEM. Goals of the FED 1. Pursue policies that affect the cost and availability of credit (they change interest rates that will.
Chapter 5 – Central Banks BA 441 – Financial Markets and Institutions.
In This Lecture…..  The Federal Reserve System  Controlling the Money Supply  Open Market Operations  The Required Reserve Ratio  The Discount Rate.
Chapter 16 Section 1 and 2.  The Fed in American History ◦ Monetary Policy  The actions the Fed takes to influence real GDP and rate of inflation ◦
Federal Reserve Created in 1914 after a series of bank failures Central bank: bank that can lend to other banks in times of need.
The Federal Reserve System Chap. 14. The Federal Reserve System (aka “The Fed”) Tries to control the nations money supply Tries to keep unemployment down.
MONEY AND BANKING Pertemuan 10 Matakuliah: J0594-Teori Ekonomi Tahun: 2009.
Functions of Money Medium of exchange: Money can be used to buying and selling goods and services. Unit of account: Prices are quoted in dollars and cents.
AIM:How does the Federal Reserve handle monetary policy? Yr8Vghttps:// Yr8Vg Do Now:
J.A.SACCO.   Functions of the Fed 1) Supplies the economy with fiduciary currency 2) Provides a clearing mechanism for checks 3) Holds depository institutions.
GOVERNMENT POLICY: MONETARY & FISCAL POLICY 1 Adapted from James R. Russell, Ph.D., Professor of Economics & Management, Oral Roberts University ©2005.
The Federal Reserve: What They Are, What They Do..
29 The Monetary System. THE MEANING OF MONEY Money is the set of _______ in an economy that people regularly use to ______ goods and services from other.
1 Objective – Students will be able to answer questions regarding how banks and thrifts create money. SECTION 1 Chapter 13, 14- Multiple Deposit Expansion.
Chapter 31 Money and Banking.
3 GOALS OF EVERY ECONOMY PROMOTE ECONOMIC GROWTH CONTROL UNEMPLOYMENT
Creating the Fed As you recall from Chapter 10, there were times when the U.S. economy suffered from panics and banking was very unstable. The government.
I. THE FEDERAL RESERVE SYSTEM
PowerPoint # 8: The Federal Reserve
The Federal Reserve System
The Federal Reserve System
The Federal Reserve System
PowerPoint # 8: The Federal Reserve
Standard SSEMA2- Explain the role and function of the Federal reserve.
Monetary Policy.
Module 27-The Federal Reserve and Monetary Policy
The Federal Reserve System “the Fed”
3 GOALS OF EVERY ECONOMY PROMOTE ECONOMIC GROWTH CONTROL UNEMPLOYMENT
Questions… Who is in charge of our money? What/Who is the Federal Reserve? How does new money get put into the economy?
The Fed By: Ben Quick.
Presentation transcript:

Functions of the Fed Chapter 12 Presentation 2

What is the (Fed)Federal Reserve? The Central Bank of America Controls the American Money Supply 7 members of the Board of Governors (14 year terms with a new term every two years) Chairman (Ben Bernanke) and Vice Chairman are appointed by the President and approved by the Senate

Central Bank 12 banks coordinated by the Board of Governors Came as a result of the Federal Reserve Act of 1913 Other Ex- Britain’s Bank of England and the Bank of Japan

What Backs Money? The value of money in the US is really backed by nothing tangible Government stabilizes the value of money

Value of Money 1. Acceptability- we are confident that others will accept money for goods/services and resources 2. Legal Tender- deemed legal tender by the government (govt and private firms can specify money order or check) 3. Relative Scarcity- supply and demand *the supply of $$ determines purchasing power

Federal Reserve Districts

Routing Numbers and Cash

Quasi-Public Banks Blend of private and public ownership Each Federal Reserve Bank is owned by the private commercial banks in the district Board of Governors (a government body) controls the Fed’s policies

Banker’s Bank Provide the same service to banks as regular banks provide to the public Accept deposits and make loans to banks Typically $150 million a day in loans ***On September 11, 2001 the Fed loaned out $45 B!!!

FOMC Federal Open Market Committee Meets regularly in D.C. to direct the sale and purchase of securities on the open market (ex- bonds- this controls how much money is in supply) Buy bonds---- increase the $ supply Sell bonds----decrease the $ supply

Functions of the Fed 1. Issuing Currency- paper money in circulation 2. Setting reserve requirements and holding reserves 3. Lending money to banks and thrifts- at discount rate (interest rate the Fed charges)

Fed Functions 4. Providing for check collecting 5. Acting as a fiscal agent-spends large sums, buys/sells bonds 6. Supervising Banks- uncover fraud 7. Controlling the money supply

Life of Money in the US Denomination Life Expectancy (Years) of Bill $1 1.8 $5 1.3 $ $20 2 $ $

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2025 SlidePlayer.com. Inc. All rights reserved.