eco 201 questions 4

1. Calculate M1 and M2 using details from the table given below.

	Value (in millions)
Currency	$10
Checkable deposits	50
Traveler’s checks	10
Savings deposits	140
Small-denomination time deposits	100
Money market mutual funds	50

2. List and describe the four functions of money.

3. What is the equation of exchange? What are the variables, which are in it, and how do they relate to each other?

4. Outline the policy choices for (a) contractionary monetary policy and (b) expansionary options of the Fed.

5. You have the assignment of making a recommendation to the Chairperson of the Fed during a period of persistent, high inflation. What would you suggest to restore stable prices?

6. What is the reserve ratio? What is the relationship between the reserve ratio and the money multiplier?

7.What is your take on the amount of money politicians spend on political campaigns? Does it have a positive/negative impact on the economy? ( no less than 350 word.)

 

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