BUSN 70 Lecture Notes - Lecture 39: Money Supply, Disinflation, Jerome H. Powell
13 Mar 2021
School
Department
Course
Professor
Document Summary
Controls the money supply with monetary policy. Supervises the federal deposit insurance of commercial banks in the federal. The means by which the fed controls the amount of money available in the economy. Aims to keep supply and demand in balance to avoid inflation/deflation. Rapid price increases (inflation) because of too little money. Economic recession and a slowdown of price increases (disinflation) because of too little growth in the money supply. Fed tools for regulating the money supply - know for midterm. One of the roles of the federal reserve is to use its policies to keep money flowing. Money is the lifeblood of the economy. If banks become too protective of their funds and stop lending money, the economy can grind to a halt. Four main monetary policy tools - know for midterm. Decisions to buy or sell u. s. treasury bill in the open market. Buying securities (stocks/bonds) increases money in supply and vice versa.
