1. Explain the term Open Market Operation. What is its intended effect on the money supply? 2. What is the Money Multiplier? What is its effect on the Money Supply? Explain your answer. 3. Explain the three drivers of the demand for money. What is the relationship between these and the shape of the demand for money curve? 4. Identify the three significant interest rates for Federal Reserve Board policy-making. Explain your answer. 5. How is the Equation of Exchange related to the Quantity Theory of Money? Explain your answer.
