1. What are the three functions of money? 2. Briefly explain how the Federal Reserve acquires assets through open-market operations (i.e., reverse-repo trades). 3. Briefly explain what required and excess reserves are and what the current level of excess reserves in the United States says about the willingness of commercial banks in the United States to lend. 4. Using the Quantity Theory of Money, derive an expression for the rate of inflation for the case when the velocity of money is not a constant and use it to explain the pre-1990 and post-1990 curves on slide 35 of lecture 16. 5. The accounting identity that relates the level of assets A, liabilities L, and equity E in a bank] is A - L = E. When A