UGBA 10 Lecture Notes - Lecture 6: Electronic Funds Transfer, Direct Deposit, Embedded System

• School: Berkeley
• Department: Business Administration Undergraduate Program
• Course: UGBA 10
• Professor: John Briginshaw

Document Summary

Federal reserve system (the fed): central bank of the us, which acts as the go(cid:448)er(cid:374)(cid:373)e(cid:374)t"s (cid:271)a(cid:374)k, ser(cid:448)es (cid:373)e(cid:373)(cid:271)er (cid:272)o(cid:373)(cid:373)er(cid:272)ial (cid:271)a(cid:374)ks, a(cid:374)d (cid:272)o(cid:374)trols the (cid:374)atio(cid:374)"s (cid:373)o(cid:374)ey supply. The federal reserve has a dual mandate: achieve price stability (i. e. low or no inflation, maximize employment. Mandate: a statement of what the fed has to do, and a statement that it has the authority to act to achieve its aims. In this case the mandate was given in 1977 by congress. Controlling the money supply: tools: reserve requirement, discount rate/federal funds rate (key rate, open-market operations. Fiscal policy: tax compared to spending, decided politically by congress, managed by the treasury, bond operations executed by the bureau of the fiscal service. Monetary policy: management of money supply and interest rates, managed by the federal reserve, operates under more of a political consensus. Monetary policy: (cid:373)a(cid:374)age(cid:373)e(cid:374)t of the (cid:374)atio(cid:374)"s e(cid:272)o(cid:374)o(cid:373)i(cid:272) gro(cid:449)th: by managing the money supply, by managing interest rates.