EC202 1nd Edition Lecture 19 Outline of Last Lecture I. Bank’s balance sheetII. Reserve bankingIII. Fractional reserve bankingIV. Money creationOutline of Current Lecture II. Federal reserve systemIII. History of the “fed”IV. Details of the “fed”Current Lecture-Federal Reserve System (“Fed”): the central bank of the U.S.-two main responsibilities-1. monetary policy-determines how much money circulates in the economy and, thereby, influences interest rates-influences key macro variables -2. oversight and regulation of financial markets-history of the fed-a government agency created by the 1913 Federal Reserve Act-pursuing public goals of growth, low inflation, and smooth operation of financial markets-details of the fed-consists of 12 regional banks-each represents a geographic area in national policymakingThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-each provides services like check clearing-headquarters is located in Washington D.C.-board of Governors-the leadership of the Fed-consists of seven governors appointed by the president to staggered 14-year terms-Chair of the Board also appointed by the president for a term of 4
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