Introduction
The Federal Reserve and Monetary Policy
In this webquest you will explore the role of the Federal reserve in controlling the money supply and how actions of the Fed impact the nation’s economy.
The Federal Reserve System is also known as The Fed. Many people don’t realize the importance and power of the Federal Reserve. It was created to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Fed plays an integral role in the United States’ government and economy. Your group’s mission is to determine our (the Fed’s) role in the government, money supply, economic growth, and central banking.
Task
TASK #1: Watch the video found at this link: http://www.stlouisfed.org/education_resources/in-plain-english-video/
As you watch the video, complete the worksheet to turn in with your work.
Process
Organization of the Fed:
Chairman of the Federal Reserve.
The Chairman of the Fed is the head of the central banking system of the United States and one of the most important decision-makers in American economic policies. Use the links provided to answer the questions below about the Chairman of the Fed:
- How does the Chairman become appointed?
- What is his term of office?
- What are his responsibilities?
- Who is Ben Bernanke? Why is he important?
- How important is the position of Chairman of the Federal Reserve?
Links for information:
http://www.federalreserve.gov/pubs/frseries/frseri.htm
http://www.federalreserve.gov/pubs/frseries/frseri3.htm
http://www.federalreserve.gov/pubs/frseries/frseri4.htm
Federal Open Market Committee (FOMC)
The FOMC is charged with overseeing open market operations in the United States, and is the principal tool of US national monetary policy. Use the links provided to find the information below:
- Who sits on the FOMC?
- What is the importance of the FOMC?
- How do they influence the monetary policy?
- What are the three tools for controlling the money supply?
- Which tool is used the most?
- What is the goal of the FOMC?
- How does the FOMC impact the economy?
Links for information:
http://www.federalreserve.gov/policy.htm
http://www.federalreserve.gov/fomc/
http://www.federalreserve.gov/pubs/frseries/frseri2.htm
Evaluation
Use the information you have gathered along with your Federal Reserve Flipbook for this portion of the assignment. Create a 4 x 4 chart. Label the columns “Tools of Monetary Policy,” “Definition,” “Action #1″ and “Action #2.”
Complete the chart. In the Action columns explain how the Fed can manipulate the tool of monetary policy and explain the intended effects on the economy.
Conclusion
Turn in your worksheet from the video, your questions on the Organization of the Federal Reserve, and your chart for a grade.