by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Bank Regulation?A safe and stable national financial system is a critical concern of the Federal Reserve. The goal is not only to protect individuals’ savings, but to protect the integrity of the financial system itself. This esoteric task is usually behind...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What are the Functions of Money? Money solves the problems that the barter system creates. The functions of money include: Medium of Exchange Store of Value Unit of Account Standard of Deferred Payment What is a Medium of Exchange? First, money serves as a medium of...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How does Monetary Policy affect Aggregate Demand? Monetary policy affects interest rates and the available quantity of loanable funds, which in turn affects several components of aggregate demand. Tight or contractionary monetary policy that leads to higher interest...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How Central Banks Carry Out Monetary Policy? Central Banks carry out monetary policy through setting the overnight interest rate, setting bank capital reserve requirements, and other techniques (such as quantitative easing) to manage the money supply in the...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Deposit Insurance? To protect against bank runs, Congress has put two strategies into place: deposit insurance and the lender of last resort. Deposit insurance is an insurance system that makes sure depositors in a bank do not lose their money, even if the...
