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What is monetary policy?
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What are the three kinds of money?
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What are the three functions of money?
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What is the difference between M 1, M2, M3, and L?
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What is the price of money?
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Name three reasons why interests rates differ.
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If the nominal interest rate is 8 percent per year and the inflation rate is 3 percent per year, what is the real interest rate?
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Name and describe the two sources of money demand.
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What three characteristics of the modern banking system were also characteristics of the early goldsmiths?
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Suppose the reserve requirement is 20%. What is the money multiplier?
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How does a bank run occur?
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Why is the Federal Reserve considered the “lender of last resort?”
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What are the three instruments of monetary policy? Which is the most important?
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Suppose the Federal Reserve sells bonds. Is this contractionary or expansionary monetary policy?
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Describe the monetary transmission mechanism.
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Illustrate how to close a recessionary gap using monetary policy in the aggregate supply-aggregate demand framework.
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Which is more precise: monetary policy or fiscal policy? Why?
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What is the Keynesian view of monetary policy?
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What is the Monetarist view of monetary policy?
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Explain the Great Depression from a Monetarist perspective.
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Use the Aggregate Supply-Aggregate Demand framework to illustrate stagflation.
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What is the Keynesian dilemma created by stagflation?
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What is the Monetarist solution to stagflation?
