DUAL Economics Module 9: Money & the Financial System

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Objectives:

  • Define and examine money, the Federal Reserve, and the money supply
  • Define inflation and the consumer price index (CPI)
  • Describe the role of monetary policy in determining inflation

Reading For This Module:

From “Introducing Economics through a Collection of Free Articles by Economists”:

  • Money Supply by Anna J. Schwartz
  • Monetary Policy by James Tobin

 Opening Vignettes:

Where does money come from and who controls that flow?  Each adjustment has far reaching consequences. What happens if these swings in available money happen too quickly or too slowly?

interest rateNew Yorker Magazine 10/25/10

 Introduction:

We all know what money is. We learn from a very young age. But where does money come from, and who decides how much of it is out there? In this module, we’ll learn the answer to these questions and some basics about monetary policy and inflation.


 Dr. Wentland Lecture: Money and the Federal Reserve (video) (15:07)

In this video, we define money, who controls it, the government’s role in printing, circulation amounts, and forms that it comes (bills, coins, bank reserves, deposits). Watch for the two kinds of money, inflation, the federal reserve’s role and the tools it has at its disposal to accomplish its functions.

 Dr. Wentland Lecture: Money and the Federal Reserve (Part 2) (16:32)


 KHAN Academy: Fractional Reserve Banking

Complete all THREE sections on the left side in the grey bar.

  • Big picture of how money enters circulation and how lending can increase the money supply (video) (08:28)
  • Weaknesses of Fractional Reserve Lending (video) (07:34)
  • Overview of full reserve banking in comparison to fractional reserve banking (video) (07:32)

KHAN Academy Fractional Reserve Banking, complete all THREE sections on the left

KHAN Academy: Money Supply

Complete THE ONLY section on the left side in the grey bar.

  • Big picture of how money enters circulation and how lending can increase the money supply (video) (08:28)

KHAN Academy: Money Supply, complete the only section on the left


Reflection:

This concludes our module and the coverage of economics in this course. We have covered a wide range of topics in economics, introducing you to a number of essential ideas that everyone should know (but often, most don’t). These modules are only the tip of the iceberg that is economics; and, whether you choose to take additional courses in economics, or read the occasional economics book/article, remember that your life will be enriched the more economics you learn and the more viewpoints you seek out. 


 Practice Quiz

Open practice quiz


 Quizzes

Take the quiz for this module on Canvas.

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