Date of Award


Document Type




First Reader

Professor David Johnson


The Federal Reserve System, a little over fifty years old, is now the dominant force in the monetary policy of our nation's economy. Through its use of the reserve requirements, discount rate and other methods, the Federal Reserve System can greatly control the mood and pace of the economy. The 'Fed', as the system is called, has over 6,750 member banks, and has over eighty-five percent of the nation's demand deposits in its vaults. However, despite this great size and the fact that almost every time a person writes a check, he is using the Federal Reserve System, the 'Fed' is a little understood organization. It will be the purpose of this paper to show how the Federal Reserve System came into being, what the structure is and how it uses its powers to control the volume of money in circulation, and thus control the movement of the economy.



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