1. Explain the structure and function of the Federal Reserve System.
2. You are the Federal Reserve Police and you go into Uckville Bank. When you check the vault you see $2.5 million. The reserve requirement is 8.0% and on the books are $28.25million in outstanding checkable deposits.
a. By how much more in checkable deposits can Uckville expand?
b. What are the excess reserves?
c. Now make up your own Federal Reserve Police problem and solve it. Show work.
3. How the Reserve Requirement Ratio (RRR) is essentially the same concept as the MPS?