Macroeconomic study of Monetary Policy

(Several OTA's had viewed this question, but no one had accepted it yet...  so I'm revising the question to be more specific in case I was too vague.)

Would you please help me understand the details on monetary policy a little better?  The following elements are touched on in my text, but not very descriptively:

In reference to "monetary policy,"  
1.  Please describe the monetary system of the United States including how it is flexible in relation to economic conditions, and how the US Federal Reserve System changes the supply of money.
2.  How does the supply of money impact the economy?  

These are topics that are touched on in my two textbooks, but the text material on monetary policy is not easily identified under any particular heading in either of the texts.  (One of my textbooks is required for my macroeconomics class, and the other was one that I picked up on for additional information).

I would like a more detailed explanation that will help me understand them in "plain language" as I head into finals week (two weeks from now).  I'd like have a more complete understanding, since we've been told that we "may see topics" about US monetary policy.