1. What are the different ways of defining money in your economy? Compare these with the monetary aggregates commonly used in the USA. Explain their differences and the reasons for such differentiation.

2. Present at least one rule model and one smoothing model of the buffer stock demand for money. What are the major differences in their implied money demand functions?

3. Compare the a priori restrictions imposed on the elasticity of substitution by the following aggregation procedures: (i) simple-sum aggregates; (ii) Divisia aggregates; (iii) VES (variable elasticity of substitution) aggregates.