The Federal Reserve and Monetary Policy

Topics: Federal Reserve System, Central bank, Monetary policy Pages: 2 (456 words) Published: November 25, 2014
The Federal Reserve and Monetary Policy

Overview

In this web quest you will explore the role of the Federal Reserve in controlling the money supply and how actions of the Fed impact the nation’s economy.

The Federal Reserve System is also known as The Fed. Many people don’t realize the importance and power of the Federal Reserve. It was created to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Fed plays an integral role in the United States’ government and economy. Your group’s mission is to determine our (the Fed’s) role in the government, money supply, economic growth, and central banking.

Task #1 - Federal Reserve Video
1. Watch the video found at this link: http://www.stlouisfed.org/education_resources/in-plain-english-video/ 2. As you watch complete the questions on the attached worksheet

Task #2 - The Banking System
Use the CNN Money 101 website http://money.cnn.com/magazines/moneymag/money101/lesson3/ to complete the Banking Scavenger Hunt (attached)

Task #3 – Chairman of the Federal Reserve

The Chairman of the Fed is the head of the central banking system of the United States and one of the most important decision-makers in American economic policies. Use the links provided to answer the questions below about the Chairman of the Fed:

How does the Chairman become appointed?
What is his term of office?
What are his responsibilities?
Who is Alan Greenspan? Why is he important?
How important is the position of Chairman of the Federal Reserve?

Links for information:
http://www.federalreserve.gov/pubs/frseries/frseri.htm
http://www.federalreserve.gov/pubs/frseries/frseri3.htm
http://www.federalreserve.gov/pubs/frseries/frseri4.htm

Task #4 – Federal Open Markets Committee (FOMC)

The FOMC is charged with overseeing open market operations in the United States, and is the principal tool of US national monetary policy. Use the links provided to find the information...

Links: for information:
http://www.federalreserve.gov/policy.htm
http://www.federalreserve.gov/fomc/
http://www.federalreserve.gov/pubs/frseries/frseri2.htm
 Task #3 – Application
Use the Internet to locate an article describing how the Fed manipulates the economy (increasing or decreasing the money supply/ interest rate). Read the article and complete the following questions:
Write a one paragraph summary of the article
How is the Fed manipulating the economy in this article?
What is the Fed hoping will happen as a result? Describe in some detail using your knowledge of economics.
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