MIT: Veronica Guerrieri’s “Principles of Macroeconomics, L16-L17: Monetary Policy”

• Read these lecture notes, which provide important details regarding attempts to manage the money supply and interest rates while achieving macroeconomic goals. As you are likely aware by now, monetary policy and fiscal policy are two instruments by which governments address economic expansions or contractions. As you progress in this course, keep in mind one instrument may be more effective in addressing those matters.

The Federal Reserve: “History of the Federal Reserve”

• Read this article for a chronological study of how the Federal Reserve System came into being.

Principles of Macroeconomics: “Chapter 9, Section 1: What Is Money?”

• Read this section and attempt the “Try It” exercises at the end of the section. The three functions of money are: A medium of exchange, that is, a means of payment; A store of value, that is, a safe or vault for assets; and A unit of account (that is, the total cost of an item).

Principles of Macroeconomics: “Chapter 9, Section 2: The Banking System and Money Creation”

• Read this section and attempt the “Try It” exercises at the end of the section. The three functions of money are: A medium of exchange, that is, a means of payment; A store of value, that is, a safe or vault for assets; and A unit of account (that is, the total cost of an item).

MIT: Veronica Guerrieri’s “Principles of Macroeconomics, L10: Money”

• Read these lecture notes, which provide information about the functions and drawbacks of money.

The Federal Reserve: “Federal Reserve Statistical Release”

• Read this report, which includes data on money stock measures, seasonally adjusted components of M1, and seasonally adjusted components of non-M1 and M2. This report by the Federal Reserve differentiates between the various levels of the money supply from one period of time to another. Read this report in order to learn about the growth and wealth of the United States’ economy and perform some rough calculations of your own.