Gallaway
ECO 305

Study Guide Test #3
 

To prepare for this test, students should study their text, notes, and homework.  Students should also be prepared to answer questions regarding assigned articles.  To help you get started, here is a list of topics with which you should be familiar.

  • Role of Central Bank
  • Reserve City & Central Reserve City Banks
  • Structure of Fed, and Reasons for its structure
  • Main Assets of Fed
  • Main Liabilities of Fed
  • Source of Fed's Capital Accounts
  • Board of Governors
  • FOMC
  • Regional Banks & their Boards of Directors
  • Fed Independence
  • Treaty of Rome, EEC
  • EU
  • Maastricht Treaty
  • EMU
  • Convergence Criteria
  • ESCB
  • ECB
  • Structure of ECB
  • ECB Ownership and profits
  • ECB Independence
  • ECB goals
  • Money Creation
  • Simple Multiplier, reasons it's too large
  • Multiple Contraction
  • T-accounts For Fed OMO from bank and from broker
  • monetary base
  • M1 multiplier (m1)
  • k, rr, re
  • Factors that affect k
  • Factors that affect rr
  • Factors that affect re
  • History of OMOs
  • Banking Act of 1935
  • Reasons why treasuries are used for OMOs
  • OMOs & foreign exchange markets
  • Sterilizing w/ offsetting OMOs
  • How OMOs affect interest rates, monetary base, reserves, and the money aggregates (be able to be specific)
  • Advantages of OMOs
  • Defensive vs. Dynamic Operations
  • RPs, Reverse RPs
  • Discount Window
    • History
    • types of credit
    • restrictions
    • substitutes
    • use in monetary policy
  • Reserve Requirements
    • Disadvantages
    • Affect on multiplier
    • Use in monetary policy
  • Reforming the Fed
  • Fed Objectives, Targets, Tools
  • Problems with monetary policy
  • Intermediate and Operating Targets

 

Comprehensive Material:

  • See previous study guides
  • See old exams