What are the six basic goals of monetary policy?
Stability of Financial markets
Stability in foreign exchange markets
Whats Nominal anchor?
A key element in successful monetary policy. It helps promote price stability by tying down inflation expectations and limiting the time-inconsistency problem. The focus is on short-run objectives.
Fed. Reserve system created when?
Why is our Fed Reserve System set up differently than other countries?
Politics fear of centralized power.
Central Bank actions affect...? 5
Amount of Credit
aggregate output and inflation
Who's involved in determining monetary policy? (Reserved requirements)
The Board of Governors
Who's involved with money supply and interest rates?
The Federal Open Market Committee.