This is “Central Bank Form and Function”, chapter 14 from the book Finance, Banking, and Money (v. 2.0). For details on it (including licensing), click here.

For more information on the source of this book, or why it is available for free, please see the project's home page. You can browse or download additional books there. To download a .zip file containing this book to use offline, simply click here.

Has this book helped you? Consider passing it on:
Creative Commons supports free culture from music to education. Their licenses helped make this book available to you. helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.

Chapter 14 Central Bank Form and Function

Chapter Objectives

By the end of this chapter, students should be able to:

  1. Define central bank and explain the importance of central banking.
  2. Briefly sketch the history of U.S. central banking.
  3. Explain when and how a country can do without a central bank.
  4. Briefly sketch the structure of the Federal Reserve System.
  5. Explain how other central banks compare to the Fed.
  6. Define central bank independence and explain its importance.
  7. Explain why independent central bankers prefer lower inflation rates than government officials do.