Institution Affiliation: Date:. Introduction Federal reserve and discounting rates Discount rates and bank interest rates Using monetary policy to avoid.

Slides:

Advertisements

Similar presentations

Federal Reserve and Macroeconomic Policy

Advertisements

Taxes, Fiscal, and Monetary Policies

The Federal Reserve System Monetary Policy. Functions of the Federal Reserve System 1.Financial Services a.The “banker’s bank” 2.Supervise and Regulate.

MONETARY POLICY Actions the Federal Reserve takes to influence the level of GDP and the rate of inflation in the economy.

Fiscal and Monetary policy

The study of the economics of countries. The big picture.

The role of government in the United States economy How does the United States government promote and regulate competition?

The Federal Reserve. Federal Reserve Basics: Considered the Nation’s central bank Does not serve individuals and businesses; its customers are thousands.

Vocabulary  Monetary Policy- Conducted by the Fed, involved either the increasing or decreasing the amount of money in circulation.  Fiscal Policy- Involves.

The Federal Reserve System

Interest Rates and Monetary Policy

Fiscal and Monetary Policy

CONTEMPORARY ECONOMICS© Thomson South-Western 17.2Monetary Policy in the Short Run  Explain the shape of the money demand curve.  Explain how changes.

Chapter 15: Monetary Policy Federal Reserve Board Chairperson Federal Reserve Board (7) Federal Open Market Committee (12) Deliberate changes in money.

Do you know anyone who is paying a mortgage off? How many people in this class want to own a home?

Monetary Policy Review

Mr. Weiss Fiscal and Monetary Policy – Section 6 The Federal Government uses fiscal policy to act in a counter-cyclical manner. The Federal Reserve uses.

Institution Affiliation: Date:. Introduction Federal reserve and discounting rates Discount rates and bank interest rates Using monetary policy to avoid.

CHAPTER 3 Monetary Policy. Copyright© 2003 John Wiley and Sons, Inc. Expansionary Monetary Policy Increases the money supply or money growth rate and.

FISCAL AND MONETARY POLICY How do policymakers use fiscal and monetary policy to stabilize the US economy?

The Federal Reserve And Monetary Policy. The Federal Reserve Act of 1913 The Federal Reserve System, often referred to as “the Fed,” is a group of 12.

Using Policy to Affect the Economy. Fiscal Policy  Government efforts to promote full employment and maintain prices by changing government spending.

Monetary Tools. Tools of Monetary Policy  Changing the reserve requirement  Changing the discount rate  Executing open market operations (buying and.

Monetary Policy review huh???? can you break it downnnnn??? MMMMonetary policy – things the Federal Reserve does to regulate the economy & influence.

Measuring the Economy Goals 9.01 & Why does the government need to know what the economy is doing?  The government makes decisions that affect.

Public Policy and The Budget Process. I. Economic Policy A.Monetary v. Fiscal Policy 1. The government uses monetary policy to influence the economy by.

Mr. Weiss APE/Honors Economics – Test Study Questions – Macro – Unit APE/Honors Economics – Test Study Questions – Macro – Unit 5 2. Which of the following.

How does the Gov’t address the Problems with the Business Cycle (Inflation and Recession) 1. Fiscal Policy 2. Monetary Policy.

Monetary Policy Control of money supply (M) and interest rates (i)

1 Money Creation ©2006 South-Western College Publishing.

Copyright© 2003 John Wiley and Sons, Inc. Power Point Slides for: Financial Institutions, Markets, and Money, 8 th Edition Authors: Kidwell, Blackwell,

Tools of macroeconomic policy & Central banking

FISCAL AND MONETARY POLICY MIX Principles of Macroeconomics Lecture 8c.

Vocabulary  Monetary Policy- Conducted by the Fed, involved either the increasing or decreasing the amount of money in circulation.  Fiscal Policy- Involves.

Fiscal Vs. Monetary. Fiscal Policy 1) Taxes and Spending -raise taxes, cut spending -cut taxes and raise spending.

1 The role of the Fed is to “take away the punch bowl just as the party gets going”

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.

Chapter 15 Monetary Policy. Money Market – determines interest rate Demand for Money Transactions Speculative Precautionary Supply of money – controlled.

Chapter 12 Monetary Policy.

Monetary Policy Ch19 Notes. I. Monetary Policy A. Functions of the “the Fed” 1. To keep the money supply in check so that the economy does not have a.

Today’s Topic: Fiscal Policy What is fiscal policy? –The taxing and spending policies of our national government Who controls fiscal policy? –Congress.

Actions of the Federal Reserve

Monetary Policy Changing reserve requirements altering minimum reserve requirements altering the “discount” rate Open market operations.

Economics Review for Test. Be able to define the following terms: Surplus Shortage Inflation Deflation Recession Depression Fiscal Monetary Trade Deficit.

Economic Policy and The Budget Process. I. Economic Policy A.Monetary v. Fiscal Policy 1. The government uses monetary policy to influence the economy.

Chapter 5 – Central Banks BA 441 – Financial Markets and Institutions.

Monetary Policy Using the amount of money and credit available to consumers to influence the economy.

The Federal Reserve System. Prior to 1913, hundreds of national banks in the U.S. could print as much paper money as they wanted They could lend a lot.

Macroeconomics The study of behavior and decision making of entire economies.

Intro to Fiscal and Monetary Policies Unit IV: Finance and Banking and Unit V: Inflation & Unemployment Stabilization Policies Mr. Griffin AP Econ – Macro.

THE FEDERAL RESERVE SYSTEM. THE PROBLEM Up until the early 1900s, many banks lacked adequate reserves to meet the needs of the public Banks operated on.

Monetary Policy What is the FED and what does it have to do with me? Schrute Bucks.

DEBIT CARDS VS. CREDIT CARDS How are they different???????

Monetary Policy Tools Describe how the Federal Reserve uses the tools of monetary policy to promote price stability, full employment, and economic growth.

The Federal Reserve System

What is the FED and what does it have to do with me?

What is the FED and what does it have to do with me?

-How a government taxes and spends money

Reserve Requirement (aka Reserve Requirement Ratio or Reserve Ratio)

Monetary Policy.

The Federal Reserve and Fiscal Policy

Monetary Policy Practice

Fiscal and Monetary Policy

The Federal Reserve System

Monetary and Fiscal Policy EOCT Practice

Monetary Policy.

BANKING & MONETARY POLICY

CHAPTER 3 Monetary Policy.

The Federal Reserve Monetary policy.

The Budget Process.

Presentation transcript:

Institution Affiliation: Date:

Introduction Federal reserve and discounting rates Discount rates and bank interest rates Using monetary policy to avoid inflation How to control money supply

Factors affecting federal reserve adjustment rates The banker’s bank Adjustment for inflation Adjustment of discount rates Recession adjustment

How discount rate affects interest rates Discount rate is interest rate extended to commercial banks by reserve banks Discount rates increase leads to increase in bank interest rates Decrease in discount rate leads to decrease in interest rate

Money policy and inflation Reducing federal fund rates leads to stronger demand for commodities Money policy discourage much borrowing and spending Increase interest rates encouraging saving Reduces disposable income for people with mortgages Discourage exports and encourage importation

Controlling money supply Adjusting banks discount rates Adjusting the reserve amount a bank should have Use of open market operations Adjustments on discount lending

Stimulus programs effect on money supply Decreases debts Making adjustments on terms of trade Increasing taxes to the citizens Budget cuts

Indicators of money supply in circulation Buying rate of the people Increase or decrease in imports and exports Change in cost goods and services Demand of goods and services

Adjusting money supply Raise and lowering lending rates Sell of bond and securities Reduce or increase bank reserve Adjustment on discount rates

USA and western Sahara compared Denmark has a higher regulatory efficiency than USA Denmark has very high taxes as compared to the USA Interest rates in the USA are higher than in Denmark

Conclusion Federal reserve role in inflation control use of monetary policy Other policies Federal reserve as bankers bank Discount rates and interest rate Federal reserve and economy Money supply Trade

Reference Dwivedi, D. N. (2010). Managerial economics. New Delhi: Vikas Publishing House Pvt. Ltd. Goyal, A. (2014). History of monetary policy in India since independence. Whittington, O. R. (2012). Wiley CPA Exam Review 2013, Business Environment and Concepts. Hoboken: Wiley.