Macroecon Final
Terms
undefined, object
copy deck
- The Federal Reserve System
- serves as the central bank of the United States
- Central Bank (a)
- accepts deposits FROM and makes loans TO commercial banks
- Central Bank (b)
- acts as the banker for the Federal Government
- Central Bank (c)
- controls the money supply
- Central bank (d)
- performs certain regulatory functions for the financial industry
- Primary elements of the Federal Reserve System
- 1. The board of governors; 2. The Regional Federal Reserve District Banks (FRBs); 3. The Federal Open Market Committee
- How many Federal Reserve [district] Banks are there?
- 12 district banks
- How many directors are in charge of the Federal Reserve Banks?
- there are 9 directors
- What do the directors of the Federal Reserve Banks do?
- The directors appoint a district president who is approved by the Board of Governors.
- How does one get on the Board of Governors?
- The seven members are chosen by the President and approved by the Senate.
- How long is a term on the Board of Governors?
- A term is 14 years
- Who on the Board of Governors is elected for a four year term?
- The Chairman
- How often does a seat become vacant in the Board of Governors?
- The 14 yr terms are staggered so that one seat is vacant every 2 years.
- Federal Open Market Committee (FOMC)
- A group of 12 members that meets every 6 weeks to review the economy.
- Who are the 12 members of the Federal Open Market Committee?
- 7 members are from the Board of Governors. 5 are presidents from Federal Reserve Banks.
- How is Velocity found?
- Nominal GDP divided by Money supply
- How do you calculate Required Reserves?
- Required reserves are calculated by multiplying the required reserve ratio by the amount in the transactions accounts (deposits).