G. Money and Banking and How Banks Create Money 1. The process of monetary creation...an application 2. The application of the monetary multiplier H. The Federal Reserve Banks and Monetary Policy 1. Effect which open market operations have on money supply 2. Effect which changes in reserve requirements have on money supply 3. Effect which changes in the discount rate have on money supply 4. Effect which changes in the money supply have on aggregate demand and equilibrium GDP 5. Strengths, shortcomings, and problems with monetary policy SUMMARY IF: FED BUYS SECURITIES DROPS RESERVE RATIO OR DROPS DISCOUNT RATE MONEY SUPPLY UP!!!!!!!!!!! IF: FED SELLS SECURITIES RAISES RESERVE RATIO OR RAISES DISCOUNT RATE MONEY SUPPLY DOWN!!!!!!!!!
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