Before there was a central bank, bank notes were backed with gold and silver. However, bank runs

Obviously, the lower rate of interest on the money you must pay back to a bank makes borrowing more attractive. However, for a consumer desiring to save money, a higher rate of interest means that it is smarter to save his or her money, as the money gaining interest in the bank is 'paying' the saver more than he or she would gain from spending it in the open market.

were frequent, when many people in a single day would demand to have their banknotes exchanged for the gold or silver the banks has in reserve. As a result of bank runs, banks would sometimes refuse to make loans and accumulate large shares of gold and silver. This created an ineffectual national monetary policy, a

Some common words found in the essay are:
Reserve Bank, Washington DC, , Reserve Banks, Federal Reserve, Board Governors, gold silver, federal reserve, reserve requirements, federal reserve bank, overheated economy, reserve bank, bank runs, save money, discount rate, central bank,
Approximate Word count = 461
Approximate Pages = 2 (250 words per page double spaced)