Daily reporting of the Dow Jones Industrial Average serves to:

1. Show the direction of the market over time
2. Distort short-term fluctuations for the financial community.
3. Identify the beginning of a recession in the economy
4. Disclose the average price of a share of stock on the major exchanges.

The Megabux National Bank currently has deposits of $200 million. If the Fed establishes a reserve requirement of 12 percent, Megabux National must hold reserves of _______ against its deposits.

1. 12 million
2. 24 million
3. 176 million
4. 200 million

President Dude, the leader of the island nation of Jaylo, refuses to raise taxes, but wants to expand many government services and increase the size of the Jaylo armed forces. He plans to pay for all of the desired expenditures by printing more money. If President Dude carries out his plan by rapidly increasing the supply of money, Jaylo will likely experience:

1. A severe recession
2. Reduced private sector spending
3. Widespread surpluses of goods and services
4. An increase in the rate of inflation