Economics (McConnell) AP Edition, 19th Edition

Chapter 33: Interest Rates and Monetary Policy

The content of this chapter may be included on the AP* Macroeconomics exam.

After reading this chapter, you should be able to:

1. Discuss how the equilibrium interest rate is determined in the market for money.
2. List and explain the goals and tools of monetary policy.
3. Describe the Federal funds rate and how the Fed directly influences it.
4. Identify the mechanisms by which monetary policy affects GDP and the price level.
5. Explain the effectiveness of monetary policy and its shortcomings.

AP Chapter 33 Introduction (13.0K)