This document outlines the objectives and framework for analyzing the conduct of monetary policy by the Federal Reserve System. It will present the Federal Reserve's balance sheet, explain the three tools of monetary policy including open market operations, discount window operations, and reserve requirements. It will also explore the multiple deposit creation process and the tools-targets-goals framework that the Federal Reserve uses to pursue its monetary policy goals while facing challenges in achieving them.

1. PART IV
Conduct of Monetary Policy

2. Objectives of Part IV
Part IV explores the conduct of monetary
policy by the Federal Reserve System and its
operational framework.
• Present a balance sheet of Federal Reserve
• Explain three tools of monetary policy
• Understand the multiple deposit creation
process as an integral part of conducting
monetary policy
• Present the tools-targets-goals framework
of conducting monetary policy and
difficulties faced by the Federal Reserve to
achieve its goals

3. Outline of Part IV
• Central Bank (Unit 21)
• Multiple Deposit Creation & Money Supply
(Unit 22)
• Conduct of Monetary Policy (Unit 23)

4. Analytical Framework in Part IV
Building blocks of conduct of monetary policy
• Balance sheet of Federal Reserve
• Monetary policy tools of the Federal
Reserve: open market operation, discount
window operation, and reserve requirement
• Multiple deposit creation process
• Tools-Targets-Goals framework of
conducting monetary policy