Part 1 – Section A.10. Money and monetary policy

[Hameed]

CMA1.A10.a. define the nature of money, including its functions as a medium of exchange, a unit of account, and a store of value

CMA1.A10.b. demonstrate an understanding of the relationship between the interest rate and the demand for money

CMA1.A10.c. define and identify the components of M1, M2, and M3

CMA1.A10.d. define the velocity of money

CMA1.A10.e. identify the role and functions of the Federal Reserve System (the Fed), including the Board of Governors and the Federal Open Market Committee, and demonstrate an understanding of how the Fed operates

CMA1.A10.f. demonstrate an understanding of the commercial banking system and the creation of money

CMA1.A10.g. define required reserves and excess reserves

CMA1.A10.h. explain the monetary multiplier

CMA1.A10.i. identify the goal of monetary policy as achieving a full-employment, noninflationary level of total output

CMA1.A10.j. list the tools of monetary policy

CMA1.A10.k. define money supply and be able to identify the graphical representation of the supply of and demand for money

CMA1.A10.l. demonstrate an understanding of how open-market operations, a change in the reserve requirements ratio, and/or a change in the discount rate affect the money supply

CMA1.A10.m. identify both the strengths and weaknesses of monetary policy

CMA1.A10.n. determine the impact of monetary policy on a firm’s availability and cost of funds