ECO 100 WEEK 10 DISCUSSION

ECO 100 WEEK 10 DISCUSSION

"Exploring the Role of the Federal Reserve Bank"

What is the FED's job and how does the FED manage the money supply? How do banks create money? Let’s explore these questions as we talk about the role of the Federal Reserve Bank, also known as the FED.

Reply to these questions in your post:

• If the FED decides to continue the process of raising interest rates, what is the likely response of firms and households to the increased cost of borrowing? 

• Thinking back to the discussion on the deficit and the debt, how might an increase in the interest rate affect a decision by the government to allow continued large deficits? 

Discuss with a peer:

o Reply to a peer and discuss if their reasoning about borrowing or allowing large deficits is similar to yours. 

For perspective, do comment on these 4 short but fascinating videos on President Andrew Jackson, as well as various U.S. founding fathers,  on fearing the actions and corruptions of big bankers!!!  Sound familiar to today!!

1 President Andrew Jackson and Big Banks--sounds like today!!!) --(from History Channel)-http://www.youtube.com/watch?v=Knf8KA5aAjw&feature=related 

2 (Also Thomas Jefferson)  --- http://www.youtube.com/watch?v=3cnItVN1Gk0 and 

3 http://www.youtube.com/watch?v=H7yjfI19b7s 

4 ( from HBO film mini series on President John Adams-- (Watch at the dinner table--George Washington, Thomas Jefferson- who had just returned from Paris, Alexander Hamilton, our first Secretary of the Treasury, and John Adams http://www.youtube.com/watch?v=UrxKOO0nKwc

NOTE: THREE DIFFERENT ANSWER POSTED CHOOSE ANYONE