Classroom Code

Finish the film and complete the questions to turn in after the break.


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Ch. 13 Review

1.  Be familiar with all 3 Functions of Money-what they are, and how an item can meet those functions.
2.  Be able to identify each component of the M-system of classification of the money supply.  Be able to explain how this system is based on the system of liquidity.  Make sure you can calculate each "M" and remember that this is a cumulative process.
3.  Explain the meaning of each characteristic of money and be able to apply each characteristic to US or foreign currency in assessing how well a form of money "works" insofar as promoting economic activity.
4.  Money Demand:  Be familiar with each type of money demand.  For each, be able to explain what types of transactions impact it, and be able to illustrate each on a money demand curve.
Types of money demand include:
a.  transactions demand for money
b.  asset demand for money
c.  total demand for money

Ch 14. Assignment: Due Friday, 2/2

You should complete this assignment while you are in class today to avoid homework.  I am at Challenge Day in the gym all day today.  Chapter 14 is a difficult and tedious chapter to read, so please try to focus on the specific topics I have highlighted and not get lost in the banking transactions.






1.  Compare early banking (the goldsmiths) to modern banking (fractional reserve banking). 




2.  Define/describe each:
a.  Required Reserves
b.  Excess Reserves
c.  Total Reserves




3.  What is the Reserve Requirement (also called the required reserve ratio)?  Why was it created and by whom?


4.  Define:
a.  asset
b.  liability




5.  Create a list of banking transactions which count as assets and liabilities for a bank.




6.  What is the money multiplier?  Describe it in general terms and provide a formula.