Chapter 13 Money,
Banking, and Monetarism
Homework Questions
1. Explain the four functions of money.
2. Define fiat, token, and commodity money.
3. Compare M1, M2, and M3.
4. How much could the money supply expand with a reserve
requirement of 8% and an infusion of $500 cash into the banking
system
in the form of a deposit made by a customer? Why
might the money supply probably not expand by this amount?
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