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The Federal Reserve Monetary Policy
Student Guide (30 Points)
Name
WE JUST LEARNED to explore the history and functions of the Federal Reserve.
TODAY’S GOAL IS to
• IDENTIFY the functions of the Federal Reserve System
• REVIEW the major tools the Federal Reserve uses to serve its functions
1. REVIEW the homework questions from the previous night.
Does the Federal Reserve purchase treasury bills directly from the Treasury?
2. Where does the Federal Reserve get the money to purchase Treasury bills?
3. What happens to our monetary base when the Federal Reserve purchases Treasury Bills?
4. What happens to our monetary base when the Federal Reserve sells Treasury Bills?
5. Would the Federal Reserve want to buy or sell Treasury bills in the open market during a recessionary gap?
6. Would the Federal Reserve want to buy or sell Treasury bills in the open market during an inflationary gap?
2. TAKE NOTES as the instructor reviews Module 27 slides 1-8.
3. Independently COMPLETE the Tackle the Test Questions 1-5
4. REVIEW the responses as a class.
5. Independently, WATCH the tutorial on the math behind open market operations.
URL: https://www.khanacademy.org/science/core-finance/money-and-banking/federal-reserve/v/fed-openmarket-operations
Optional: Watch the tutorial on Quantitative Easing
URL: https://www.khanacademy.org/science/core-finance/money-and-banking/federalreserve/v/quantitative-easing
ASSESSMENT (30 Points)
1. Section review question #5
2. Section review question #11
3. Section review question #13
4. Section review question #14
TOMORROW WE WILL LEARN ABOUT the demand for money.