16. Chapter 15
The Federal Reserve and Open Market Operations
Central Banks
Money Supplies
Fractional Reserve Banking
Reserve Ratio - Money Multiplier
Monetary Tools
Systemic Risks
Control
AD-AS Model
21. Because prices are sticky going down, you
cannot reduce inflation without having a
temporary recession
As the price level falls, spending increases
back to capacity
22. How do Central Banks Manage the
Money Supply?
Through their policy tools with member
banks