OVERVIEW: WEEK OF NOVEMBER 18th

Topic

ob-ko554_blinde_d_201010241814471.jpg We have come to the last two topics of this course, specifically monetary policy and fiscal policy. However, this week, we tackle money and banking which is an introductory topic to monetary policy. These next few weeks are full of critical and important information regarding the prescriptive policies used by policymakers to correct GDP gaps.

The most important element of this chapter is how banks fulfill their roles in creating money. Pay close attention to this process as it will be critical in understanding how monetary policy (conducted by the Federal Reserve) functions. To that aim, review the money multiplier very closely and make sure that you can compute it when asked.

Objectives

By the end of this week, you will be able to:

  • Analyze the role of money and banking in the influencing of aggregate economic performance.
  • Define money by its functions
  • Measure money in terms of M1 & M2
  • Articulate the role of banks
  • Explain how banks create money

Weekly Schedule

Due date Activity
Reading: Textbook Chapter 14
Study Guide Problems