Describe how rapid inflation can undermine moneys ability

Reference no: EM13774203

1. What are the three basic functions of money? Describe how rapid inflation can undermine moneys ability to perform each of the three functions.

2. Which two of the following financial institutions offer checkable deposits include within the M1 money supply: mutual fund companies; insurance companies; commercial banks; securities firms; Christ institution? Which of the following is not included M1 or M2: currency held by the public; checkable money market mutual fund balances; small-demonized (less than $100,000) time deposits; currency held by banks savings deposits?

3. What are the components of the M1 money supply? What is the largest component? Which of the components of MI is legal tender? Why is the face value of a coin greater than its intrinsic value? What near-monies are included in the M2 money supply?

4. Now does the purchasing power of the dollar relate to the nation's price level?

5. Who selects the chairperson of the Federal Reserve System? Describe the relationship between the Board of Governors of the Federal Reserve System and the 12 Federal Reserve Banks. What is the composition and purpose of the Federal Open Market Committee (FOMC)?

6. What is meant when economists say that the Federal Re-serve Banks are central banks, quasi-public banks, and bankers' banks? What are the seven basic functions of the Federal Reserve System? 104

7. How do each of the following relate to the financial crisis of 2007-2008: declines in real estate values, subprime mortgage loans, mortgage-backed securities, MG.

8. What is TARP and how was it funded? How do government loans relate to the concept of moral hazard?

Reference no: EM13774203

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