In this lesson, we take a detailed look at the government entity that is directly responsible for controlling the money supply and undertaking business-cycle stabilizing monetary policy -- the Federal Reserve System. The Federal Reserve System is the U.S. economy's number one bank regulator. And they do this regulation with the goal of ensuring the that the nation has just the right about money to avoid high rates of unemployment and inflation. To understand how the Federal Reserve System does it's job, we take a close look at how it is structure and policy tools it has under its' control.

• The first unit introduces the Federal Reserve System, with a discussion of King Clarence and his role in assisting the operations of Fred the Goldsmith.
• In the second unit we take a look at the importance of controlling the banking system, and the consequences if the control is ineffective.
• The structure of the Federal Reserve System is examined in the third unit, with the highlights being the Chairman of the Federal Reserve System and the Federal Open Market Committee.
• The fourth unit then explores the assorted policy tools used by the Federal Reserve System to control the banking system and the money supply, including open market operations, discount rate, and reserve requirements.
• We close out this lesson in the fifth unit with a few thoughts on the role politics play in the formulation of monetary policies.

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