This treatment – Notes Regarding FRB Monetary Policy – and a lengthier treatment of Interest Rates and Payments (click here) are supplemental to one another.

There is nothing as practical as good theory.  A good theory explains.  A good theory gives the laws of operation or behavior.  A good theory is enlightening and useful.

There often exist real economic problems including a.) an excess stock of capital or inadequate monetary demand, and b.) an excess or deficient supply of money for the magnitudes and frequencies of the transactions of production and sale. (Click here for next subtopic)