This lesson discusses how open market operations effect the rate at which banks lend to each other overnight. [Banking, Money, Finance playlist: Lesson 14 of 24]

This lesson presents more information on the mechanics of the Federal Funds rate and how it increases the money supply. [Banking, Money, Finance playlist: Lesson 15 of 24]

Principles of Macroeconomics 2e covers the scope and sequence of most introductory economics courses. The text includes many current examples, which are handled in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition has been thoroughly revised to increase clarity, update data and current event impacts, and incorporate the feedback from many reviewers and adopters.Changes made in Principles of Macroeconomics 2e are described in the preface and the transition guide to help instructors transition to the second edition.

By the end of this section, you will be able to:

Explain the reason for open market operations
Evaluate reserve requirements and discount rates
Interpret and show bank activity through balance sheets