Course: ECO 110

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Unit 8 Practice Problem » Pages

Unit 8 Practice Problem

Unit 8 Practice Problem
1. What is a demand deposit?  What are the components of M1?  To what account is your debit card linked and how does that effect M!?
2. Why are credit cards not considered money?
3. Describe the term, fractional reserve system.
4. What is the function of the Federal Reserve System?
5. Why does the buying of US government securities by the FED change the money supply?