- influencing the economy through changing and reserve wit influence te money supply and available credit
- Reserve requirement-% that set by the feds of the minimum of reserves a bank must have
- discount rate-banks borrow money from the federal reserves
- federal fund rate-banks loan out loans to each other
- OMO (open market operation)- security/bonds
- OMO- Buy bonds
- Discount rate- decreases
- federal fund rate- decreases
- require reserve ratio- decreases
- OMO-Sell bonds
- Discount Rate- increases
- Fed fund rate- increases
- Required reserve ratio-increases
-Excess reserves (ER)=actual reserves (AR)- Required reserves (RR)
-Required reserves= amount of deposit x required reserve ratio
-Maximum amount a single bank can loan=the change in excess reserves caused by a deposit
-the money multiplier= 1/required reserve ratio
-total change in loans= amount a single bank can lend x money multiplier
-total change i the money supply= total change in loans + amount of fed action
-total change in the demand deposit= total change in loans+ any cash deposited
Your blog design is really simple so it is easy to find the notes that I want. On this post, there are something that I want to change to make it clearer.
ReplyDelete4 Options of Monetary Policy:
-Reserve Requirement is the percent that is set by the FED of the minimum reserve a bank must have.
-Discount Rate is the banks borrow money from the FED (use as the last resort)
-Federal Fund Rate is the loan banks loan each other overnight and no one knows about this.
-OMO (Operation Market Operation) is the buying/selling of security/bonds, done by FED. If they buy, they expand the money supply; if they sell, they shorten the money supply.
I hope this comment help your note.
The color coding really helps differentiate the different keywords. You also laid everything out so it's easy to read and follow. There is also a sufficient amount of information to fully understand the concept. Nice!
ReplyDeleteYour blog is very organized, and well put together. The color scheme of your blog makes studying and reviewing the material very easy, and also blends well with the overall highlights that you have made to clarify certain points. I would add more videos and graphs, visuals basically, to tie down all your information. Examples are crucial in this unit, so I believe those should be added as well. All-in-all, very good blog!
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