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Lecture 9: Structure and function of Central bank (Federal reserve)

Lecture 9: Structure and function of Central bank (Federal reserve). The lecture’s aim is to make the students understand how the Federal reserve is formed and structured. Monetary tools and policies that used by the Federal reserve to affect the money supply.

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Lecture 9: Structure and function of Central bank (Federal reserve)

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  1. Lecture 9: Structure and function of Central bank (Federal reserve) • The lecture’s aim is to make the students understand • how the Federal reserve is formed and structured. • Monetary tools and policies that used by the Federal reserve to affect the money supply. • 2 types of central bank: dependence and independence.

  2. Board of governors, financial advisers. Location of 12 Federal reserve banks Federal open market committee 9.1 Structure of Federal reserve

  3. 9.1 (cont) • Question: What do you know about Federal reserve chairman? How long can Fed chairman serve in his term? • http://www.youtube.com/watch?v=2XcCb1G8hC8 (Bernanke)

  4. Board of governors, financial advisers. Location of 12 Federal reserve banks Federal open market committee 9.2 Monetary tools used by Fed reserve. suggest Review and decide decide decide Reserve requirement Discount rate Open market operation

  5. 9.3 Types of the central bank • Dependent central banks? • Independent central banks? • What kind of central bank is Fed, dependent or independent?

  6. 9.4 Independent status of other central banks

  7. 9.4 (example) • http://www.youtube.com/watch?v=7iPaiylUYW0 (how the UK government make decision on monetary policy and its tools.)

  8. Advantages Have a long term goals and objectives Less be affected or influenced by politicians or president Disadvantages responsibility of Fed chairman become too big. May not be able to coordinate monetary policy with fiscal policy. 9.5 Advantages and disadvantages of independent central banks.

  9. 9.6 Do you support an independent or dependent central banks?

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