PART 1:  REGULATION

General Questions:

Using Microsoft Word, respond to the following questions thoroughly, in 150-300 words for each question.  Use your textbook, Financial Markets and Institutions by Frederic S. Mishkin and Stanley G. Eakins Eighth Edition, as your first and major reference. Be sure to explain your answers thoroughly, use specific examples, use in-text citations and full reference and cite your sources. Also, be sure this is in APA format.

1. Why are financial markets so heavily regulated?  Is this level of regulation fair or needed, given the level of regulation in other industries?
2. In most countries there is one central bank that serves the entire nation.  In the United States, there are 12 regional banks that serve the nation.  Why was this structure adopted in the United States?
3. Is the Fed a true independent entity?  Does Congress or the President have any control over the actions of the Fed?

PART 2:  THE FED

Go to the Federal Reserve System Web site.  Use the information on this site and in your textbook, Financial Markets and Institutions by Frederic S. Mishkin and Stanley G. Eakins Eighth Edition, when addressing the following questions:

1. What are the basic duties of the Fed?
2. What is the basic structure of the Fed?
3. What is the FOMC?  What is the membership of the FOMC?  What are the responsibilities or duties of the FOMC?
4. What are the roles of the regional Fed banks?  Why is the New York Fed bank so important?
5. Who are the member banks?  What is their role? What are the benefits/costs associated with membership in the Federal Reserve System?

Required:

Using Microsoft Word, write a 3-6 page essay that addresses the above-noted questions, using APA format with in-text citations and full reference.  Also, needs to be plagiarism free.

PART 3:  MONETARY POLICY AND RESERVES

You are analyzing the financials for the Marysville National Bank (MNB), and know that the Fed has imposed a 10% reserve requirement. Using this abbreviated balance sheet, answer the questions listed below.

Required:

1. What are excess reserves?  What are required reserves? Does MNB have any excess reserves?  If so, how much?
2. Can MNB make any additional loans?  If so, how much?
3. If MNB makes all the new loans it can, what would the new balance sheet look like?
4. If all the possible loans are made, would the money supply change?  If so, by how much? Explain how the money supply might change initially, and then over time.
5. Assume now that the Fed imposes a more restrictive monetary policy by increasing the reserve requirement to 20%.  Using the initial balance sheet above, answer questions 1-4 again.  Show what the revised balance sheet would look like and describe all changes that will occur as a result of the change in reserve requirement.

Deliverables:

1. For Part 1 and Part 2, use a Microsoft Word document in APA format with in-text citations and full reference.  Also, use the textbook, Financial Markets and Institutions by Frederic S. Mishkin and Stanley G. Eakins Eighth Edition, as a reference
2. For Part 3, use a Microsoft Excel spreadsheet.  Show all your calculations and conclusions.
3. All parts must be plagiarism free.

Grading Criteria for Part 2 and Part 3 listed below: