• 6.4: Monetary Tools

    • Principles of Macroeconomics: "Chapter 9, Section 3: The Federal Reserve System"

      Read this section and attempt the "Try It" exercises. This reading will provide additional perspectives and insight on the role of central banks and how they create and destroy money.

    • The Federal Reserve: "Monetary Policy" File

      Read this article, which adds depth to the three tools of monetary policy and covers the difference between the federal funds rate, which is set by banks, and the targeted federal fund rate. Some of the reading describes how the Fed provides signals to the market for the purpose of stimulating economic activity and goal achievement.

    • John Petroff's "Macroeconomics, Chapter 12: Monetary Policy" Page

      Read this chapter, focusing particularly on the section titled "Open Market Operations".

    • John Petroff's "Macroeconomics, Chapter 12 Quiz: Monetary Policy" URL

      Click the "Review Quiz" link at the bottom of the page and follow the instructions to complete the quiz.

    • Fractional Reserve Banking and Money Creation Quiz

      Please attempt this quiz as a way to check your understanding of fractional reserve banking, the reserve requirement, money creation, and the role of the Fed in these processes.

      Notes:

      • There is no minimum required score to pass this assessment, and your score on this assessment will not factor into your overall course grade.
      • This assessment is designed to prepare you for the Final Exam that will determine your course grade. Upon submission of your assessment you will be provided with the correct answers and/or other feedback meant to help in your understanding of the topics being assessed.
      • You may attempt this assessment as many times as needed, whenever you would like.