Question 1: Describe the differences between commodity money and fiat money, making sure to explain what makes fiat money work.
Question 2: Define and explain the money multiplier. Identify the change to the money supply in the following situation: The required reserve ratio is 12.5 percent and the Fed increases the monetary base by $100.
Question 3: Describe the monetary policy tools the Fed can use to affect the monetary base.
Question 4: Compare and contrast expansionary and contractionary monetary policies.
Question 5: Identify and describe the means by which the Fed can affect the money multiplier. How do changes in policy carry through to the economy?