TAILIEUCHUNG - Lecture Issues in economics today - Chapter 12: Monetary policy

In this chapter, students will be able to: Describe the role of the Federal Reserve of the United States, define macroeconomic stability as the Fed’s primary goal while noting that controlling inflation has typically been the way it measures its success, integrate an understanding of the tools of monetary policy with their application utilizing an aggregate supply-aggregate demand model, describe the recent history of monetary policy and the Federal Reserve’s role in the 2007-2009 recession. | Chapter 12 Monetary Policy Chapter Outline GOALS, TOOLS AND A MODEL OF MONETARY POLICY CENTRAL BANK INDEPENDENCE MODERN MONETARY POLICY The Federal Reserve Nicknamed “The Fed”. Established in 1913 by Congress primarily as the authority for bank regulation. The power to “coin money” was granted to Congress by Article 1 Section 8 of the US Constitution but this power was delegated to the Federal Reserve. The power to regulate the amount that exists in the economy was granted to the Federal Reserve in an attempt to avoid the boom and bust periods of the late 1800s. This power allows the Federal Reserve to alter interest rates without political interference. There are 12 regional Federal Reserve Banks Boston, New York, Philadelphia, Richmond, Atlanta, Cleveland, St. Louis, Kansas City, Chicago, Dallas, Minneapolis, and San Francisco Goals of Monetary Policy Provide sufficient money to the economy so that it may grow at a sustainable rate. Dampen the impact of the business cycle. Measures

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• Issues in economics today
• Lecture Issues in economics today
• Macroeconomic issues
• International issues
• Price control issues
• Monetary policy
• Economics of crime
• Economics of children
• Opportunity cost
• Prescription drugs
• Demand model
• Elasticity of demand
• Firm production
• Perfect competition
• Gross domestic product
• Federal spending
• Fiscal policy
• Flaws in the CPI
• International trade
• International monetary fund
• Trade agreements
• Economic model
• Environmental problems
• Economic models of health care
• Medicaid costs
• Public insurance
• Human capital
• Measuring poverty
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