2. CENTRAL BANKING AND MONETARY POLICY Chapter 7 Matakuliah: F0882 - Economic Analysis Tahun: 2009

3. Bina Nusantara University 3 Learning Outcomes Central Banking and the Federal Reserve System The Effect of Money on Output and Prices

4. A Bird’s-Eye View of How Monetary Policy Affects Output and Inflation

5. The Major Players in Monetary Policy

6. While the Fed Ultimately Pursues Objectives like Stable Prices, Its Short-Term Operations Focus on the Intermediate Targets

7. Federal Reserve Determines Federal Funds Rate

8. The Money Market

9. Changes in Monetary Policy or Prices Affect Interest Ra tes

10. Central Bank determines the Money Supply, Changing Interest Rates and Investment, Thereby Affecting GD P

11. An Expansionary Monetary Policy Shifts AD Curve to the Right, Raising Output and Prices