Chap026 Central Banking and Monetary Policy.ppt

Chapter 26
Central Bankingand ary Policy
T-191Figure 26-1
A Bird’s-Eye View of How ary Policy Affects Output and Inflation
The Major Playersin ary Policy
T-192Figure 26-2
While the Fed Ultimately Pursues Objectives like Stable Prices, Its Short-Term Operations Focus on the Intermediate Targets
T-193Figure 26-3
Federal Reserve DeterminesFederal Funds Rate
T-194Figure 26-4
Source: Federal Reserve Board
The Money Market
T-195Figure 26-5
Changes in ary Policy or Prices Affect Interest Rates
T-196Figure 26-6
Central Bank Determines the Money Supply, Changing Interest Rates and Investment, Thereby Affecting GDP
T-197Figure 26-7
An Expansionary ary Policy Shifts AD Curve to the Right, Raising Output and Prices
T-198Figure 26-8