ECON-1010 Chapter Notes - Chapter 25: Federal Open Market Committee, Open Market Operation, Federal Bank

• School: Vanderbilt University
• Department: Economics
• Course: ECON-1010
• Professor: Hojjatallah Ghandi

Document Summary

The federal reserve: the u. s. central bank ( the fed ) Primary responsibility is to maintain a stable and effective monetary system. Consists of a board of governors in d. c. and 12 federal reserve banks across the u. s. Board has 7 members appointed by president. Terms is 14 years and one governor"s term expires every other year. The 12 individual banks clear checks and manage electronic transfers, distribute currency, and engage in regulation of private banks. Fed"s objectives: maximum employment, stable prices, and moderate long-term interest rates . Federal open market committee (fomc): the committee that bears the most responsibility for choosing the course of monetary policy. Made up of the 7 governors and 5 members currently serving as federal. Monetary policy: policies of the fed that affect the supply of money and credit (in order to achieve their objectives) 4 primary tools that the fed uses to achieve these goals: The interest rate paid to banks on excess reserves.