Web Links

• p. 365: Go to http://www.federalreserve.gov/releases/h3/Current/ to see Federal Reserve reports on the current amounts of required and excess reserves at U.S. depository institutions.
• p. 379: To learn more from the Federal Reserve Bank of St. Louis about the growth of sweep accounts, go to http://research.stlouisfed.org/aggreg/, and scan down the page to "Retail and Deposit Sweep Program."
• p. 382: To keep up with the latest issues in deposit insurance and banking with the assistance of the FDIC, go to http://www.fdic.gov/.

Issues and Applications Web Resources:

• How did the Fed respond to the two largest stock market crashes in history? Learn more about the 1929 and 1987 experiences in a 1987 essay by the then-president of the Federal Reserve Bank of Minneapolis via http://minneapolisfed.org/research/qr/qr1211.html.
• To find data on the discount-window borrowings and reserve deposits of depository institutions, go to http://www.federalreserve.gov/releases/h41/.

E-Checks and the Money Supply
In this chapter, you learned about how monetary policy actions of the Federal Reserve induce changes in total deposits in the banking system. Now let's think about monetary policymaking in a world with online checking.

     Title: What Is eCheck?

     Navigation: Go directly to the eCheck home page http://www.echeck.org/overview/index.html and click on What Is eCheck?

Application
Read the discussion, and then answer the following questions.

1. Are e-checks substitutes for currency and coins, or are they substitutes for traditional paper checks? Does the answer to this question make a difference for how e-checks are likely to feature in the money multiplier process?

2. Suppose that there is widespread adoption of e-check technology by consumers and businesses. Would this affect the basic money multiplier model that we developed in this chapter? If so, how? If not, why not?