Macro. Chapter 16 【The Monetary System】

1. The roles of money
Shen wants to purchase a new computer and go to the Caribbean for spring break. The computer is

2. Liquidity
Consider the relative liquidity of the following assets:

3. The kinds of money
Personal possession of currency is prohibited in U.S. prisons, although, in practice, prisoners still

4. Money aggregates
Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be

5. The Federal Reserve's organization
While all members of the Federal Reserve Board of Governors vote at Federal Open Market Committee (FOMC) mettings,

6. Required and excess reserves
Suppose that Second Republic Bank currently has $100,000 in demand deposits and $

7. The money creation process
Supoose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess

8. The reserve requirement, open market operations, and the moneysupply
Assume that banks do not hold excess reserves and that households do not hold currency, so the

9. Banking requirements
( 3 different versions)

10. The discount rate and the federal funds rate
The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Federal