Questions:
Question 1
How can the Fed affect the money supply by using the discount rate?
Question 2
What are the differences between M1 and M2?
Question 3
Explain how banks are financial intermediaries. What are reserves? What are excess reserves? Explain how the Fed can affect the quantity of excess reserves in the banking system.
Question 4
Discuss the factors that led to deregulation of U.S. financial markets in the 1980s.
Question 5
What are the three functions of money, and why are they important?
Your response should be at least 75 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.