1. Classify each of these transactions as an asset, a liability, or neither for each of the "players" in the money supply processthe federal reserve, banks, and depositors.

a. You get a $10,000 loan from the bank to buy an automobile.

b. You deposit $400 into your checking account at the local bank.

c. The Fed provides an emergency loan to a bank for $1,000,000.

d. A bank borrows $500,000 in overnight loans from another bank.

e. You use your debit card to purchase a meal at a restaurant for $100.

7. "The Fed can perfectly control the amount of reserves in the system." Is this statement true, false, or uncertain? Explain.

10. Describe how each of the following can affect the money supply: (a) the central bank; (b) banks; and (c) depositors.

13. During the Great Depression years from 1930-1933, both the currency ratio c and the excess reserves ratio e rose dramatically. What effect did these factors have on the money multiplier?

14. In October 2008, the Federal Reserve began paying interest on the amount of excess reserves held by banks. How, if at all, might this affect the multiplier process and the money supply?

15. The money multiplier declined significantly during the period 1930-1933 and also during the recent financial crisis of 2008-2010. Yet the M1 money supply decreased by 25% in the Depression period but increased by more than 20% during the recent financial crisis. What explains the difference in outcomes?