MGMT 1 Lecture Notes - Lecture 20: Federal Open Market Committee, Federal Deposit Insurance Corporation, European Central Bank
Document Summary
Almost every factor related to economy is influenced by the federal reserve. Money is anything people generally accept as payment for goods and services. Barter is direct trading of goods and services without the use of money. It costs 1. 8 cents to make a penny. It costs 9. 4 cents to make a nickel (cost more to produce than worth) Money supply refers to amount of money available to buy goods and services. Money supply managed by federal reserve and impacts (works with treasury department) inflation. Recently fed has pumped huge amounts of money into economy through quantitative easing. M1: coins and paper bills, demand deposits (checking accounts), traveler"s check (easy to transfer to cash) M2: m1 + savings account, money market accounts, mutual funds, cdo"s etc. M3: m2 + deposits by institutional investors (pension funds, insurance companies) The european central bank and other central banks have responsibilities similar to federal reserve. A strong dollar helps export but hurts imports.
