ECO 103: Ch.13 & 14 Discussion: Money, Banks and the Federal Reserve DISCUSSION NO EXPLAINATION NEEDED.

1. Name a currency that has not been named yet in this discussion.

2. What are the three purposes of money?

3. Which is the most important of the three and why?

4. My parents were married in Lynnfield in 1970 and were given a china set from England. I have that set today in almost brand new condition and a $5 bill. Which is worth more and why?

5. Which is more liquid and why?

6. Why will M1 never have as much money as M2?

7. Is M1 or M2 more liquid?

8. Which is more liquid and why?

9. You own a bank and people deposit savings into your bank. Are these deposits an asset or liability for your bank in the end if all goes well?

10. You own a bank and give loan money to the applicants you approve. Are these loans an asset or liability for your bank in the end if all goes well?

Ch.16 Discussion: Supply Side Options

You run for president of a dying economy. Describe the single most important part ofyour recovery program.