Chapter 16

StudyBlue printing of Chapter 16 html, body, div, span, applet, object, iframe, h1, h2, h3, h4, h5, h6, p, blockquote, pre, a, abbr, acronym, address, big, cite, code, del, dfn, em, font, img, ins, kbd, q, s, samp, small, strike, strong, sub, sup, tt, var, b, u, i, center, fieldset, form, label, legend, table, caption, tbody, tfoot, thead, tr, th, td { margin: 0; padding: 0; border: 0; outline: 0; font-size: 100%; background: transparent; } body { line-height: 1; } blockquote, q { quotes: none; } blockquote:before, blockquote:after, q:before, q:after { content: ''; content: none; } /* remember to define focus styles! */ :focus { outline: 0; } /* remember to highlight inserts somehow! */ ins { text-decoration: none; } del { text-decoration: line-through; } /* tables still need 'cellspacing="0"' in the markup */ table { border-collapse: collapse; border-spacing: 0; } /* end RESET */ .header { min-width:800px; } .logo { padding:6px 20px 2px 20px; margin:0; font-size:25px; font-weight:bold; color:#808285; position:relative; border-bottom: 1px solid #c5c5c5; } .logo-blue { color:#70adc4; } .logo-desc { font-weight:normal; font-size:19px; color:#cccccc; margin-top:50px; position:absolute; display: none; } .back-button { position:absolute; top:20px; right:20px; font-size:13px; line-height:25px; color:rgb(0,175,225); font-weight:normal; } .back-button a { color:rgb(0,175,225); } .instructions { padding:0; margin:0; width:100%; position:relative; color:rgb(100,100,100); } .step-holder { border-left:1px solid #ededed; margin-left:20px; } .steps { padding:15px 0; float:left; width:24%; border-right:1px solid #ededed; text-align:center; } .steps-01 { } .steps-02 { } .steps-03 { } .steps-04 { } .label { padding:5px 10px; } .print-button { } .print-button a { background-color:rgb(0,175,225); color:white; line-height: 19px; padding:9px 8px 5px 30px; font-size:14px; text-decoration:none; background-image: url(images/printer.png); background-repeat: no-repeat; background-position: 7px 50%; -moz-border-radius: 5px; -webkit-border-radius: 5px; } .print-button a:hover { background-color:black; } .theNote .content { width: 8.0in !important; margin: 5px auto; padding:20px; background-color:white; } .theNote .header { border-bottom: 1px dashed #C8C8C8; font-size: 17px; padding: 0 0 10px; line-height: 19px; color: #00ADE1; min-width:500px; } .theNote .body { font-size: 14px; line-height: 19px; padding: 10px 0; } .theNote{ padding:6px 0; clear:both; background-color: rgb(200,200,200); } .theNote h3{ color: rgb(100,100,100); } .theNote h1, .theNote h3{ background-color:white; padding:2px 20px; width:8.0in !important; margin: 0 auto; font-size: 15px; } .theNote h1{ padding-top: 10px; font-size: 15px; } .theNote h1:first-child{ font-size: 20px; } .theNote h3 { font-size: 14px; font-weight: normal; } #options { border: 3px double #ccc; padding: 5px 12px; margin: 10px 50px 10px 20px; float: left; } #info { border-top: 1px solid #ccc; padding-top: 5px; font-style: italic; } li { margin: 5px 10px 5px 25px; } ul li { list-style: disc; } ol li { list-style: decimal; } img { border: 0; } table { clear: both; width: 100%; border: 1px solid #c5c5c5; border-width: 1px 0; margin: 0; page-break-after: always; } table#page { page-break-after: auto; } td { text-align: center; font-size: 12px; border-bottom: 1px dashed #c5c5c5; height: 1.75in; width: 50%; padding-left: 15px; } .leftside { border-right: 1px solid #cccccc; padding: 0 15px 0 0; } .bottom td { border-bottom: none; } .clearfix { clear:both; line-height:1px; height:1px; } img { max-width:80%; max-height:150px; margin:20px; } @media print {.header { display: none; } .content .header{ display:inherit; } table { border: 1px dashed #bbb; border-width: 1px 0; } .theNote{ background-color:white; } } (16.1) 1. Monetary policy : the government's ability to manipulate the supply of financial capital or liquidity. 2. In most countries the central bank manages monetary policy 3. In the U.S. the central bank is the Federal Reserve 4. Fed (established 1913 and can be abolished by Congress) is the monetary authority 5. Chair (appointed by President and approved by Senate)- 4yr renewable term so that the president that appointed them could be gone Federal Reserve Board runs the Federal Reserve System Board (7 members including the chair (appointed by President and approved by Senate)) 14yr nonrenewable term so that there's independence from shifting political interest Federal reserve system contains 12 districts each served by a Federal Reserve bank 6. Decisions made by (Federal Open Market Committee- FOMC and Fed's Board of Governor's) FOMC compose of 7 board members and presidents of 5 of the Federal Reserve Banks 7. The Fed (an independent agency) vs. Treasury Department (a Deaprtment of teh Executive Branch under the President- they collect the federal taxes and pays the federal gov. bills) 8. If the gov tax revenue's are not sufficient to pay those bills (deficit) Treasury borrows money by selling Treasury bonds or bills and promise a payback on specific terms 10. The financial system is the arrangement of institutions that coordinate the intentions of suppliers and demanders of financial capital. The attitudes of the suppliers and demanders are independent and the price adjusts to bring these intentions into balance - The financial intermediaries attract financial capital and then lend it to those who need financial capital. 11. An example of a financial intermediary is a bank. - banks make a return from the business they do by: (a) attract capital by paying interest for it (b)make a return by lending that capital to someone else at a higher rate of interest -if the financial system is perfectly competitive all the participants will make a normal return on their investment. 12. assets : anything that you have that has value in the market liability : a claim by others on your assets portfolio : all the assets and liabilities you have. Ex: t-account Full reserve system :