Lesson 17 Student Handout 2

52.1999
Name: ______________________________________ Date: _______________ Hour: ________

Monetary Policy Guided Notes

MONETARY POLICY

THE FEDERAL RESERVE

(Federal Reserve Bank of Dallas, 2006)

WHAT does the Federal Reserve do?

1) Keep ____________ ____________.

2) Makes _____________ ______________.

 CHECK CLEARING HOUSE

 HOLD RESERVE OF MONEY

(Chicago Federal Reserve Image, n.d.)

Berrien RESA 1 Economics in Marketing Education II

 Lesson 17 Student Handout 2
52.1999
Name: ______________________________________ Date: _______________ Hour: ________

3). Stabilizes __________________ _________________.

 CHANGE RESERVE REQUIREMENTS

 OPEN MARKET OPERATIONS (most common strategy used by FED)

 SET INTEREST RATES

DISCOUNT RATE
Interest rate set by
the FED charging
banks for their loans
IF FED DISCOUNT RATE

PRIME RATE
Interest rate set by
the banks to charge
customers for loans

IF FED DISCOUNT RATE

Berrien RESA 2 Economics in Marketing Education II