I-Be able to define and expiant the Tu Know the difference between \"money\" and
ID: 1129671 • Letter: I
Question
I-Be able to define and expiant the Tu Know the difference between "money" and "near money" -Know what comprises the money (stock) supply and their definitions. Know when the Federal Reserve System (FED) was created -Know the framework of the Federal Reserve System - Know what currently backs the money supply -Know the functions of the Federal Reserve banks. -Be able to define quasi-public bank and bankers' banks. 4 Know the main responsibility of the board of governors. lo - Know the main responsibility of the FOMC. 13-Know about bank balance shets: defintion, terms (required reserve, reserve ratio, total or ac L1 . I Know about the transactions demand and the asset demand for money. reserve, and excess reserve) and how to make changes on the balance sheet, or i problem n a w -Know how commercial banks use loans to increase or decrease the money supply -know about how much money a single bank can loan out and the effect on the banking syste - Know the effect of changes in the reserve ratio on excess reserves. Know who sets the supply of money -Know the monetary policy tools and know how they would be applied during a recession o Be able to define tight money policy and easy money policy and describe their impact on ir y the definitions and the impact of "federal fund rate", "discount rate", and 'prime rat inflation. and investment spending. nlin mmpared to fiscal policy.Explanation / Answer
Answer 2 - Money refers to something which can be used as a medium of exchange while Near Money are financial assets that be converted into cash for exchange purposes.
Answer 3 - Money supply basically refers to stock or supply of currency which is in liquid terms flowing in a particular country's economy. Money supply is generally classified into four M's ie., M1, M2, M3 and M4 on the basis of size and type of the instrument. M1 consists of the currency, demand deposits and other deposits with the federal reserve. M2 consists of savings with the post office savings banks account and M1. M3 consists of time deposits with the banks and M1. M4 consists of M3 and deposits of savings bank account in total but excluding national savings certificate.
Answer 4 - Federal Reserve System was created on 23rd December, 1913 under the Federal Reserve Act. It was created when a series of financial crisi had hit the US and the urge to control the monitary policies.
Answer 5 - Federal Reserve System's framework can be divided into 5 different parts mainly -