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commodity money and fiat money
Dear OTA: Could you please answer the following questions on monetary policy to better help me understand economics.Thank you very much!
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?
Consider the problem of the book assuming that the utility is Cobb-Douglas (U (C, l) = C α l β )
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