BUS 1000 Chapter Notes - Chapter 20: Federal Open Market Committee, Open Market Operation, Federal Funds Rate
Document Summary
Inflation: too much money chasing to few goods. 1: deflation: not enough money chasing the same number of goods, allows us to manage the prices of goods and services, the size of the money supply also affects employments and economic growth or decline. The board"s primary function is to set monetary policy: the fomc have 12 voting members and is the policymaking body. i. 7 member board of governors + the president of the ny reserve bank. It buys and sells government securities in open market operations. It lends money to member banks at an interest rate called the discount rate. 4. pays interest) to invest in interest-bearing loans to other customers. 2. full variety of banking services to their members. Insure deposits in individual accounts up to a certain amount. 2: the federal deposit insurance corporation (fdic, fdic: an independent agency of the u. s. government that insures bank.