History of the Federal Reserve July 12, 2011 Introduction The monetary system within the United States of America is a complex, intricate system. At the top and in control of this system is the Federal Reserve and its board of governors. The “Fed” has had an interesting history within our country since its creation in 1913. It is the central bank of the United States. It is the third such attempt, and the most successful central bank to be formed in America. The creation
Words: 3001 - Pages: 13
Using a typical balance sheet identify the main sources and uses of bank funds. What alternatives does a bank have if it needs temporary funds? What is the most common reason that banks issue bonds? (15) On a typical balance sheet, the main sources of banks funds (liabilities) are the following: * Transaction deposits * Savings deposits * Time deposits * Money market deposit accounts * Federal funds purchased * Repurchase agreements * Eurodollar borrowings Its
Words: 994 - Pages: 4
School of Business ------------------------------------------------- Syllabus ECO/372 Version 4 Principles of Macroeconomics Whenever there is any question including about what assignments are due, please remember this syllabus is considered the ruling document. Group Number: GA11BSB08 Course Start Date: 07/17/2012 Course End Date: 08/14/20112 Course Schedule: Workshop 1 – July 17, 2012 Workshop 2 – July 24, 2012 Workshop 3 – July 31, 2012 Workshop
Words: 1958 - Pages: 8
structure of the Federal Reserve System and the money supply process, we mentioned three policy tools that the Fed can use to manipulate the money supply and interest rates: open market operations, which affect the quantity of reserves and the monetary base; changes in discount lending, which affect the monetary base; and changes in reserve requirements, which affect the money multiplier. Because the Fed’s use of these policy tools has such an important impact on interest rates and economic activity
Words: 9295 - Pages: 38
unemployment rate, the rate of inflation, and Gross Domestic Product. These rates and measurements are used to determine the health of an economy. Depending on its rates, it will show the strengths and weaknesses in its economic status of growth or downfall. When the unemployment rate is high, that shows symptoms of malfunctioning in the economic system. This rate is incurred through a random amount of surveys in households and those answers of those surveys each month is how the unemployment rate is determined
Words: 2456 - Pages: 10
true what many say, “money makes the world go round”. Between 1775 through 1791 to finance the war America printed the first paper currency know as “continentals.” Prior to this America relied on the barter system which, made fighting almost impossible. Welcoming the bills and foregoing bartering lead to inflation. The inflation was mild at first however is accelerated rapidly as the war progress. Eventually, people lost faith in the notes and they quickly became worthless. This would lead
Words: 3835 - Pages: 16
ACCT-346 Quizzes and Exams http://uphomework.com/downloads/acct-346-quizzes-exams/ ACCT/346 All Quizzes and Exams Solved – A Grade Guaranteed ACCT346 Test Bank All Quizzes + Midterm Exam + Final Exam Chapter 1- 20 CHAPTER 1 TRUE/FALSE QUESTIONS 1. The purpose of the financial system is to bring savers and borrowers together. 2. Businesses are never DSUs. 3. A financial claim is an “IOU” from a deficit spending unit. 4. Investment bankers help DSUs bring new primary security issues to
Words: 25527 - Pages: 103
NBER WORKING PAPER SERIES THE FINANCIAL CRISIS AND THE POLICY RESPONSES: AN EMPIRICAL ANALYSIS OF WHAT WENT WRONG John B. Taylor Working Paper 14631 http://www.nber.org/papers/w14631 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 January 2009 I am grateful to John Cogan, Angelo Melino, John Murray, George Shultz and participants in the Global Markets Working Group for helpful comments and suggestions. The views expressed herein are those of the author(s) and
Words: 7455 - Pages: 30
Part Three Answers to End-of-Chapter Problems Chapter 1 ANSWERS TO QUESTIONS 1. THE INTEREST RATE ON THREE-MONTH TREASURY BILLS FLUCTUATES MORE THAN THE OTHER INTEREST RATES AND IS LOWER ON AVERAGE. THE INTEREST RATE ON BAA CORPORATE BONDS IS HIGHER ON AVERAGE THAN THE OTHER INTEREST RATES. 2. The lower price for a firm’s shares means that it can raise a smaller amount of funds, so investment in facilities and equipment will fall. 3. Higher stock prices mean that
Words: 46188 - Pages: 185
inflation rate. (b) exchange rate. (c) interest rate. (d) aggregate price level. Answer: C 5. The bond markets are important because (a) they are easily the most widely followed financial markets in the United States. (b) they are the markets where interest rates are determined. (c) they are the markets where foreign exchange rates are determined. (d) all of the above. Answer: B 6. Interest rates are important to financial institutions since an interest rate increase
Words: 35303 - Pages: 142
