1. Fiscal and Monetary Policy
Macroeconomics
Fiscal and Monetary Policy

2. I. Goals Explain the history of central banking.
Describe the structure of the Federal Reserve.
Describe the causes of the 2008 recession and the action of the federal government and the Federal Reserve.

3. II. History of Central Banking
Original Bank of the United States (1791 – 1811)
Second Bank of the United States (1816 – 1837)
Era of Free-banking (1837 – 1864)
National Banks (1864 – 1913)
The Federal Reserve System ( )
The Panic of 1907 illustrated a need for a regulated banking system.

4. III. Structure of the FED
Board of Governors
Seven Members
14 year terms.
Appointed by President and approved by Senate.
Chairman of the Board
Appointed by President and confirmed by Senate.
Serves 4 year terms.

5. III. Structure of the FED
Federal Reserve District Banks
12 District banks.
Provides banking and regulatory services.
Each bank and run by a board of directors.
Federal Open Market Committee
Board of Governors + five regional bank presidents.
One of the five presidents is always the president of the New York Branch.
New York Branch carries out Open Market Operations.
Milton Friedman “Purpose of the FED”: