1)Assume a new bank has just opened for business. It has deposits of $1,000,000 and a required reserve ratio of 15 percent. How much can this bank lend, and why?

2)How does the reserve requirement impact the banking system as a monetary policy tool, and is it used frequently?

3)How can the Fed make bonds more attractive as an alternative to holding money, and what is the impact to the money supply?

4)How can the Fed increase the level of output for the economy through open market operations?