From Chap. 16 of Economics: A Tool for Critically Understanding Society (ETCUS):

1. Explain the differences among the transactions, precautionary, and speculative demands for money. List five factors that influence your demands for money.

1. Why is a barter economy unsuitable for today's world?

For a barter exchange to be realized, both parties have to want the exact item on offer by the other party at the same time and in the same place. This would be impossible for almost all of the exchanges that take place in a modern economy.

1. Suppose you discovered $50,000 of old dollars stuffed in a mattress in your dorm.
   1. What would be the effect of the $50,000 of "new money" on the banking system? Explain.
   2. What would be the effect if you spent the money on a new BMW?
   3. What if you stuffed the money back into the mattress?

1. Which of the monetary policy tools is used most actively by the feds? The most frequent policy tool used by the Fed is "open market operations" (see p. 396). See p. 398-9 for other tools.

1. If the economy were experiencing high unemployment and moderate inflation, what would be the appropriate monetary policy? Why?