Course: Principles of Macroeconomics (ECON 2) · Silver Oak University (fictional sample) · Prof. Ashford
Focus: The Federal Reserve & Monetary Policy · Objective 7 · SLO A & B

📋 Module Overview Page — "Start Here" (Canvas: Page, published)

Week 10 — The Federal Reserve & Monetary Policy: Structure, Tools & the Money Market

Last week you learned how banks create money out of a single deposit. This week we meet the institution that sets the stage for all of it: the Federal Reserve — the United States' central bank. You'll learn the Fed's structure (the Board of Governors, the 12 regional Reserve Banks, the FOMC) and its dual mandate, then its policy tools (open-market operations, the discount rate, reserve requirements, interest on reserves), and finally the money market — the graph where money demand and money supply meet to set the interest rate, and how the Fed's tools shift that supply curve.

The big question: What does the Federal Reserve actually do, and how do its tools move the interest rate through the money market?

By the end of this week, you can:

• describe the Fed's structure (Board of Governors, 12 regional Reserve Banks, the FOMC) and its dual mandate (stable prices and maximum employment);
• name the Fed's policy tools — open-market operations (buying/selling bonds), the discount rate, reserve requirements, and interest on reserves — and state which direction each moves the money supply;
• read the money market model — a downward-sloping money-demand curve and a vertical money-supply curve — and correctly shift money supply either direction to find the new equilibrium interest rate;
• keep straight that an interest-rate change moves along money demand — it never shifts it.

Do this, in order:

1. Read & watch — the Week 10 resources (≈40 min). → Readings & Resources page
2. Lecture Tutorial — work through the Fed's structure, tools & the money market with your AI tutor (≈45 min). Due Sun, Nov 8. → submit the chat share link + summary
3. Practice Exercises — 6 quick reps, ungraded (≈15 min).
4. Quiz 10 — 10 questions, closed to AI (≈20 min). Due Sun, Nov 8.
5. Discussion 10 — "Should the Fed be independent of elected politicians?" Initial post Fri, Nov 6, replies Sun, Nov 8.
6. Assignment 10 — the Fed tools & money-market problem set (100 pts). Due Sun, Nov 8.
7. Workshop 10 — Graph & Model Workshop: "The Money Market" — build the money market on Desmos and shift money supply both directions (50 pts). Due Sun, Nov 8.

A note before you start: the money market looks like AD–AS's cousin — one curve slopes, one curve is fixed (vertical) — and once you can shift the vertical one confidently in both directions, the transmission chain to AD next week will click fast. You've got this. 💪

📣 Welcome Announcement (Canvas: Announcement; available_from_offset_days = 0 — posts Mon, Nov 2)

Subject: Meet the institution behind the headlines 👋

Hi everyone,

Every time the news says "the Fed raised rates" or "the Fed held steady," there's a whole structure and a whole graph behind that sentence. This week we open both up.

This week, don't miss:

• The Fed's structure — the Board of Governors, 12 regional Reserve Banks, and the FOMC (the committee that actually votes on policy) — and its dual mandate: stable prices and maximum employment, held together at once.
• The policy tools — open-market operations (buying or selling government bonds), the discount rate, reserve requirements, and interest on reserves — each one either adds reserves to the banking system or drains them.
• The money market — a new graph: money demand slopes down, money supply is a straight vertical line the Fed can slide left or right. Buy bonds, supply shifts right, the interest rate falls. Sell bonds, supply shifts left, the interest rate rises. And an interest-rate change on its own never shifts money demand — it just moves you along the curve you already have.

Start with the Module Overview ("Start Here"), then the readings, then your AI Lecture Tutorial. Bring a question to class — the tool-versus-direction pairings are where most people trip first, so ask early.

See you in class,
Prof. Ashford