1. Define velocity of money and discuss the major determinants of velocity.

2. Assume GDP is currently $10,850 billion per year and the quantity of money is $833 billion. What is the velocity of money? The nation collectively holds enough money to finance how many days worth of GDP expenditure?

3. If bank A borrows $10 million from bank B, what happens to the reserves in bank A? In the banking system? Please explain.

4. If bank A borrows $10 million from the Fed, what happens to reserves in bank A?. In the banking system? Please explain.