1. Monetary Policy
Unit 16.3

2. The Fed’s Monetary Tools
Monetary Policy
Actions that change the money supply
Open Market Operations
Fed buys and sells government securities
Federal Funds Rate (FFR)
Rate at which banks lend to each other
Discount Rate
Rate at which the Fed loans money
Prime Rate
Rate for best customers

3. Approaches to Monetary Policy
Expansionary Monetary Policy
Easy Money Policy
Contractionary Monetary Policy
Tight Money Policy

4. Impacts and Limitations of Monetary Policy
Short Term Effects
Policy Lags
Monetarism