{"id":2866,"date":"2023-02-19T16:10:57","date_gmt":"2023-02-19T16:10:57","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/fresh-take-4-2-the-u-s-banking-system\/"},"modified":"2024-12-06T00:21:47","modified_gmt":"2024-12-06T00:21:47","slug":"fresh-take-4-2-the-u-s-banking-system","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/fresh-take-4-2-the-u-s-banking-system\/","title":{"raw":"Fresh Take 4.2: The U.S. Banking System","rendered":"Fresh Take 4.2: The U.S. Banking System"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Explain the difference between M1 and M2 money supply&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Explain the difference between M1 and M2 money supply<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Explain the role of banks&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14721,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Explain the role of banks<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the functions of the Federal Reserve System&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the functions of the Federal Reserve System<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what the Federal Reserve System does to carry out monetary policy&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what the Federal Reserve System does to carry out monetary policy<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<section class=\"textbox recall\">Recall that the U.S. money supply is categorized as M1 and M2 money. Banks act as financial intermediaries. And the Federal Reserve implements monetary policy.<\/section>\r\n<h2>\u00a0M1 vs. M2 Money<\/h2>\r\n<p>https:\/\/www.youtube.com\/watch?v=1ZuiHMK9iZ0<\/p>\r\n<p>You can <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/Segment303TheMoneySupply.html\" target=\"_blank\" rel=\"noopener\">view the transcript for \"Segment 303: The Money Supply\" (opens in new window).<\/a><\/p>\r\n<h2>Banks as Financial Intermediaries<\/h2>\r\n<p>https:\/\/youtu.be\/M2xAWtIE7vA<\/p>\r\n<p>You can <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/WhatareFinancialIntermediaries.html\" target=\"_blank\" rel=\"noopener\">view the transcript for \"What are Financial Intermediaries?\" (opens in new window).<\/a><\/p>\r\n<h2>The Federal Reserve's Monetary Policy Tools<\/h2>\r\n<h3>Open Market Operations<\/h3>\r\n<p><iframe src=\"\/\/plugin.3playmedia.com\/show?mf=2587580&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=jvRwFkDdWZU&amp;video_target=tpm-plugin-hwt66xbl-jvRwFkDdWZU\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\r\n<p>You can <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/Segment406OpenMarketOperations_transcript.txt\" target=\"_blank\" rel=\"noopener\">view the transcript for \"Segment 406: Open Market Operations\" (opens in new window).<\/a><\/p>\r\n<h3>Changing the Reserve Requirement<\/h3>\r\n<p><iframe src=\"\/\/plugin.3playmedia.com\/show?mf=9475113&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=OZDgPqX56Rg&amp;video_target=tpm-plugin-oyec6y0s-OZDgPqX56Rg\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\r\n<p>You can <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/Segment409ReserveRequirements_transcript2.txt\" target=\"_blank\" rel=\"noopener\">view the transcript for \"Segment 409: Reserve Requirements\" (opens in new window).<\/a><\/p>\r\n<h3>Changing the Discount Rate<\/h3>\r\n<p><iframe src=\"\/\/plugin.3playmedia.com\/show?mf=3704585&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=Q01KEwDc1fc&amp;video_target=tpm-plugin-f7hu0hyv-Q01KEwDc1fc\" width=\"800px\" height=\"520px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\r\n<p>You can <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/InvestopediaVideoFedsDiscountRate_transcript.txt\" target=\"_blank\" rel=\"noopener\">view the transcript for \"Investopedia Video: Fed's Discount Rate\" (opens in new window).<\/a><\/p>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Explain the difference between M1 and M2 money supply&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Explain the difference between M1 and M2 money supply<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Explain the role of banks&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14721,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Explain the role of banks<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the functions of the Federal Reserve System&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:14720,&quot;10&quot;:0,&quot;11&quot;:4,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the functions of the Federal Reserve System<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand what the Federal Reserve System does to carry out monetary policy&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand what the Federal Reserve System does to carry out monetary policy<\/span><\/li>\n<\/ul>\n<\/section>\n<section class=\"textbox recall\">Recall that the U.S. money supply is categorized as M1 and M2 money. Banks act as financial intermediaries. And the Federal Reserve implements monetary policy.<\/section>\n<h2>\u00a0M1 vs. M2 Money<\/h2>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Segment 303: The Money Supply\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/1ZuiHMK9iZ0?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>You can <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/Segment303TheMoneySupply.html\" target=\"_blank\" rel=\"noopener\">view the transcript for &#8220;Segment 303: The Money Supply&#8221; (opens in new window).<\/a><\/p>\n<h2>Banks as Financial Intermediaries<\/h2>\n<p><iframe loading=\"lazy\" id=\"oembed-2\" title=\"What are Financial Intermediaries?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/M2xAWtIE7vA?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>You can <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/WhatareFinancialIntermediaries.html\" target=\"_blank\" rel=\"noopener\">view the transcript for &#8220;What are Financial Intermediaries?&#8221; (opens in new window).<\/a><\/p>\n<h2>The Federal Reserve&#8217;s Monetary Policy Tools<\/h2>\n<h3>Open Market Operations<\/h3>\n<p><iframe loading=\"lazy\" src=\"\/\/plugin.3playmedia.com\/show?mf=2587580&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=jvRwFkDdWZU&amp;video_target=tpm-plugin-hwt66xbl-jvRwFkDdWZU\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\n<p>You can <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/Segment406OpenMarketOperations_transcript.txt\" target=\"_blank\" rel=\"noopener\">view the transcript for &#8220;Segment 406: Open Market Operations&#8221; (opens in new window).<\/a><\/p>\n<h3>Changing the Reserve Requirement<\/h3>\n<p><iframe loading=\"lazy\" src=\"\/\/plugin.3playmedia.com\/show?mf=9475113&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=OZDgPqX56Rg&amp;video_target=tpm-plugin-oyec6y0s-OZDgPqX56Rg\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\n<p>You can <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/Segment409ReserveRequirements_transcript2.txt\" target=\"_blank\" rel=\"noopener\">view the transcript for &#8220;Segment 409: Reserve Requirements&#8221; (opens in new window).<\/a><\/p>\n<h3>Changing the Discount Rate<\/h3>\n<p><iframe loading=\"lazy\" src=\"\/\/plugin.3playmedia.com\/show?mf=3704585&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=Q01KEwDc1fc&amp;video_target=tpm-plugin-f7hu0hyv-Q01KEwDc1fc\" width=\"800px\" height=\"520px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><\/p>\n<p>You can <a href=\"https:\/\/course-building.s3-us-west-2.amazonaws.com\/Intro+to+Business\/Transcriptions\/InvestopediaVideoFedsDiscountRate_transcript.txt\" target=\"_blank\" rel=\"noopener\">view the transcript for &#8220;Investopedia Video: Fed&#8217;s Discount Rate&#8221; (opens in new window).<\/a><\/p>\n","protected":false},"author":21,"menu_order":13,"template":"","meta":{"_candela_citation":"[{\"type\":\"copyrighted_video\",\"description\":\"Segment 303: The Money Supply\",\"author\":\"Philadelphia Fed\",\"organization\":\"\",\"url\":\"https:\/\/www.youtube.com\/watch?v=1ZuiHMK9iZ0\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"},{\"type\":\"copyrighted_video\",\"description\":\"What are Financial Intermediaries?\",\"author\":\"Marginal Revolution University\",\"organization\":\"\",\"url\":\"https:\/\/www.youtube.com\/watch?v=M2xAWtIE7vA\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"},{\"type\":\"copyrighted_video\",\"description\":\"Segment 406: Open Market Operations\",\"author\":\"Philadelphia Fed\",\"organization\":\"\",\"url\":\"https:\/\/www.youtube.com\/watch?v=jvRwFkDdWZU\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"},{\"type\":\"copyrighted_video\",\"description\":\"Segment 409: Reserve Requirements\",\"author\":\"Philadelphia Fed\",\"organization\":\"\",\"url\":\"https:\/\/www.youtube.com\/watch?v=OZDgPqX56Rg\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"Investopedia Video: Fed\\'s Discount Rate\",\"author\":\"Investopedia\",\"organization\":\"\",\"url\":\"https:\/\/www.youtube.com\/watch?v=Q01KEwDc1fc\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":2853,"module-header":"fresh_take","content_attributions":null,"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2866"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/users\/21"}],"version-history":[{"count":13,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2866\/revisions"}],"predecessor-version":[{"id":8970,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2866\/revisions\/8970"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/parts\/2853"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapters\/2866\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/media?parent=2866"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/pressbooks\/v2\/chapter-type?post=2866"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/contributor?post=2866"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/wp-json\/wp\/v2\/license?post=2866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}