Lesson 6.01 The Federal Reserve System

• Introduction
• Learn
• Try It
• Task

Introduction

One of the requirements for a nation to be considered a developed country is to have a national central bank. The central bank of England is the Bank of England. Germany's central bank is the Bundesbank. The central bank of the United States is called the Federal Reserve System.

The purpose of having a central bank was learned from the many economic lessons in our history. Most people have heard of the Great Depression, and just recently the country went through the Great Recession, but there have been many serious depressions, recessions, bank failures and money issues that have caused many citizens financial trouble and ruin. Over the course of time, an understanding of economics has shown the necessity of a central bank with powers over monetary policy that is responsible for maintaining a stable money supply and sound financial system.

 

 

 

 

Lesson Objectives Following successful completion of this lesson, students will be able to: explain the structure of the Federal Reserve. list and explain the tools used by the Federal Reserve to control the money supply. explain how the money market graph works. The above objectives correspond with the Alabama Course of Study: Economics objectives: 10, 10.1.