TOPICS
- What is Money?
- The Money Market Model: MD and MS
- The Structutre and Functions of the Federal Reserve and
Banking Systems
OUTCOMES
Why is money important?
Why do we use money? Why do we care about money? What is
wrong with barter?
What is money? How can
cigarettes or beer be money?
List and explain the three
functions of money.
Define the money supply M1 and
near monies M2.
Identify two types of demand for
money and the main determinant of each.
The money market graph: explain
what is meant by equilibrium in the money market and the
equilibrium rate of interest; what happens when there is
a change in the money supply?
What causes interest rates to
change?
Describe the structure of the U.S.
banking system.
Explain why Federal Reserve Banks
are central banks, quasi public banks, and bankers'
banks.
Describe the functions of the
Federal Reserve System and point out which role is the
most important.
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