Discussion Post: Money, Banking and Monetary Policy
• Discuss and explain all of the various things that you can think of that you believe will affect the size so-called money multiplier. For each of the things that you identify, make sure that you explain how and why they will affect the multiplier.
• Write an overview of how the Federal Reserve System interacts with commercial banks and the public to influence the amount of money in circulation in the economy.
To put these things in context, remember that the monetary base (MB) is the amount of money that is created by the Federal Reserve system through Open Market Operations. The M1 measure of the money supply represents currency in circulation + directly checkable deposits + travelers checks. The so-called M1 multiplier represents the ratio of the M1 money supply divided by the monetary base (m=M1/MB)
The response must include a reference list. Using one-inch margins, double-space, Times New Roman 12 pnt font and APA style of writing and citations.