14.During this Pandemic crisis the Federal Reserve is increasing the money supply. Briefly explain why they would do that.

15.All of the following items are part of M-2 money supply except one. Which item is not part of M-2? Coins, paper currency, checkable accounts, time deposits or credit cards.

16.If there is greater transactional demand for money, what happens to the interest rates?

17.According to Classical Economists, if money supply should change, then only one part of the economy will be affected. What part of the economy is that?

18.According to Keynes, money supply is connected to the real economy. What is the important link that connects money supply to real GDP?

19.If there is a severe recession, what would the Monetarist Economists suggest the Federal Reserve monetary policy should be to combat the recession?

20.If the money supply (M) is $300, the real GDP (Q) is 200, the velocity of money (V) is 6, the interest rates is 5% and the inflation rate is 3%, then calculate nominal GDP.

21.Calculate M-1 money supply for this economy.

Money Market Mutual Funds $100

Currency in Banks 20

Currency in Circulation 70

Savings Deposits 60

Time Deposits 90

Bonds held by the Public 100

Checkable Deposits 80

22.Many people believe as a result of the Pandemic crisis, our economy will experience stagflation. What is stagflation? Briefly explain.

23.According to the short run Phillips Curve, if the Federal Government decides to reduce the unemployment rate below the full employment level, then what should we expect happening in the economy?

24.The Federal Open Market Committee met on 27th and 28th April 2021 and decided to target the Federal Funds Interest Rate at what range level?

25.Give the title and author of any economic book you have read during the Fall semester. It cannot be the course textbook by McConnell or a textbook used in your recent Business/Finance course.