1. Please refer textbook page 31731911.2 The Fed and the monetary base. a) What is the M1 as money supply? What is monetary base? b) Identify the monetary base in the following FED's balance sheet. THE FED'S BALANCE SHEET c) In the above Fed's balance sheet, bank reserves are liabilities. For a bank, reserves are a bank's asset or liability? Reserves include which two components? (Hint: Refer textbook page 256) d) What are the two methods central banks use to change the money base? e) Suppose someone keeps $100 in cash under her/his mattress. One day, he/she takes it deposit it in a checking account. What will happen to monetary base? Explain your answer. 1. Please refer textbook page 31731911.2 The Fed and the monetary base. a) What is the M1 as money supply? What is monetary base? b) Identify the monetary base in the following FED's balance sheet. THE FED'S BALANCE SHEET c) In the above Fed's balance sheet, bank reserves are liabilities. For a bank, reserves are a bank's asset or liability? Reserves include which two components? (Hint: Refer textbook page 256) d) What are the two methods central banks use to change the money base? e) Suppose someone keeps $100 in cash under her/his mattress. One day, he/she takes it deposit it in a checking account. What will happen to monetary base? Explain your