The Federal Reserve System Objective:  What: To study the Federal Reserve System and how it influences the economy How: By...
How the Federal Reserve is set up <ul><li>The Fed is made up of about 6,000 banks across the U.S. </li></ul><ul><li>The Fe...
How the Federal Reserve is set up <ul><li>The Fed is divided into 12 districts across the U.S.  </li></ul><ul><li>Each dis...
What does the Fed do? <ul><li>The Fed makes sure that member banks do business according to certain rules </li></ul><ul><l...
What if the bank fails? <ul><li>Each bank that is a member of the Federal Reserve System must also be a member of the Fede...
Controlling the Money Supply <ul><li>The main job of the Fed is to control the money supply in the U.S. </li></ul><ul><li>...
Reserve Requirement <ul><li>Is the amount of money the Fed tells banks they must keep back from using </li></ul><ul><li>It...
Discount Rate  <ul><li>This is the amount of interest the Fed charges to loan money to banks </li></ul><ul><li>The higher ...
Tight or Easy money <ul><li>When the Fed wants to encourage people to spend more it increases the money supply, this is ca...
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The Federal Reserve System

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Transcript of "The Federal Reserve System"

  1. 1. The Federal Reserve System Objective: What: To study the Federal Reserve System and how it influences the economy How: By guided note taking through a PowerPoint presentation
  2. 2. How the Federal Reserve is set up <ul><li>The Fed is made up of about 6,000 banks across the U.S. </li></ul><ul><li>The Fed is run by seven individuals called the board of governors </li></ul><ul><li>Each member is appointed by the President </li></ul>The board as of 2008
  3. 3. How the Federal Reserve is set up <ul><li>The Fed is divided into 12 districts across the U.S. </li></ul><ul><li>Each district has 1 Federal Reserve Bank </li></ul><ul><li>The main office of the Fed is in Washington D.C. </li></ul>
  4. 4. What does the Fed do? <ul><li>The Fed makes sure that member banks do business according to certain rules </li></ul><ul><li>Clearing checks is one service of the Fed </li></ul><ul><li>The Fed also lends money to member banks </li></ul>
  5. 5. What if the bank fails? <ul><li>Each bank that is a member of the Federal Reserve System must also be a member of the Federal Deposit Insurance Corporation (FDIC) </li></ul><ul><li>The Fed and FDIC will work together to make sure your money is protected </li></ul>
  6. 6. Controlling the Money Supply <ul><li>The main job of the Fed is to control the money supply in the U.S. </li></ul><ul><li>The fed uses two main tools for this </li></ul><ul><li>Reserve Requirement </li></ul><ul><li>Discount Rate </li></ul>
  7. 7. Reserve Requirement <ul><li>Is the amount of money the Fed tells banks they must keep back from using </li></ul><ul><li>It can be as much as 22 percent of the money people have put in the bank </li></ul><ul><li>The higher the number the less money banks have to loan </li></ul>
  8. 8. Discount Rate <ul><li>This is the amount of interest the Fed charges to loan money to banks </li></ul><ul><li>The higher the rate the less money banks want to borrow </li></ul>
  9. 9. Tight or Easy money <ul><li>When the Fed wants to encourage people to spend more it increases the money supply, this is called easy money </li></ul><ul><li>When the Fed wants to slow down the economy is reduces the money supply, this is called tight money </li></ul>

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