STATE SOCIAL STUDIES STANDARDS:

12.3.4 Understand the aims and tools of monetary policy and their influence on economic activity (e.g., the Federal Reserve).

12.2.9 Describe the functions of the financial markets.

TOTAL POINT VALUE: 38 POINTS

DUE DATE: ON THE DAY OF THE TEST

• We will have one test that will be on both Chapter 11 and Chapter 12
• The info from chapter 11 will be from certain portions the chapter
• Section 1 (What is Money? & The characteristics of Money,)
• Section 2 (The Inconvertible Fiat Money Standard,)
• Section 3 (Other Depository Institutions)
• Section 4 will be skipped.

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CHAPTER 12 Section 1

The Federal Reserve System

Section Summary (14 points for section)

List each heading or subheading on your paper and write at least three sentences summarizing each one of them.

• The Fed and other Regulatory Agencies
• Structure of the Fed

• Private Ownership
• Board of Governors
• Federal Open Market Committee
• Federal Advisory Council

• Responsibilities of the Fed

• State Member Bank Supervision
• Holding Companies
• International Operations
• Mergers
• Check Clearing
• Consumer Legislation
• Currency
• Margin Requirements

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Section 2

monetary Policy

Section Summary (12 points for section)

List each heading or subheading on your paper and write at least two sentences summarizing each one of them.

• Fractional Bank Reserves
• How Banks Operate

• Organizing a Bank
• Accepting Deposits
• Making Loans
• Reaching Maturity

• Fractional Reserves and Monetary Expansion

• Loans and Monetary Growth
• Reserves and the Money Supply

• Tools of Monetary Policy

• Reserve Requirement
• Open Market Operations
• Discount Rate
• Other Tools

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Section 3

monetary Policy, Banking, and the Economy

Section Summary (12 points for section)

List each heading or subheading on your paper and write at least two sentences summarizing each one of them.

·        Short-Run Impact

·        Long-Run Impact

o       (SKIP) Historical Precedents

o       Monetizing the Debt

o       Taming Inflation

·        Timing and Burden of Monetary Policy

·        The Politics of Interest Rates

o       Defining Money

·        Bank Failures and Safety in Banking

o       Bank Failures

o       Disposing of Failed Banks

o       Reasons for Failure

o       New Capital Requirements