Chapter 30

In this chapter, Mankiw introduces monetary policy and inflation. He begins by discussing the value of money, the quantity of money, and the price level. He then defines a new graph and how the previous three terms are all connected. They are connected through the quantity theory of money. Mankiw also defines the quantity equation.

Article Review 7

Throughout this article Stockman attacks Yellen on personal matters more so than on economic matters. All he really says is how badly her Keynesian plans have failed while even he acknowledges that his own solutions would fail. However he does point out that Janet and her backers are treating the US economy like it is a little baby about to die, and that its only cure is stimulation, money printing and zero percent interest.

Chapter 29

This Chapter is all about money. It deals with the monetary system. Money has three forms: medium of exchange, unit of account, and store of value. The money is also used as currency, which is how it is measured in the economy as coins or paper money.

Also in the Chapter is the major concept of the Federal Reserve. The Federal Reserve works to regulate and maintain balance in the banking system. It is run by a Board of Governors and uses a Federal Open Market Committee to organize trades and policies.

The Federal Reserve is responsible for controlling the amount of money through open market trades and discount rates. Through open market trades, The Fed controls the money by buying and selling government bonds. And through the discount rates, the Fed controls the amount of money by changing the interest rate to banks.