17. Suppose the Federal Reserve increases the discount rate the then: A) money supply is likely to decrease. B) money supply is likely to increase. C) money supply is not likely to change. D) federal funds rate must decrease. 18. Which of the following explains a main difference between M1 and M2? A) the dollar amount of M1 is much larger than the dollar amount of M2. B) M1 includes checkable deposits, but M2 does not. C) M2 includes checkable deposits, but M1 does not. D) M2 includes savings deposits and time deposits, but M1 does not. 19. The Federal Reserve can influence the course of financial crises because it: A) determines tax rates. B) determines government spending. C) conducts monetary policy. D) is responsive to the people who elected its members to office. 20. Generally, the more liquid an asset is: A) the lower its purchasing power. B) the lower its rate of return. C) the higher its capacity to store value over time. D) the higher its rate of return