Here is a picture of the questions.

1. List 3 functions of money. (3) 2. What is a barter system List major difficulties of the barter system. (4) 3. Why banking system is said to be on fractional reserve. Please explain. (4) 4. How do banks create money? Please explain (5) 5. You are given the following balance sheet of the Summer Bank (21) Balance sheet of the Summer bank Assets Liabilities Cash $9,000 Deposited with the Fed $ 6,000 Deposits $ 100,000 Loans $135,000 Capital $ 50,000 Total $ 150,000 Total $ 1 50,000 The required reserve ratio (RRR) on all deposits is 10% a. What, if any, are this bank's excess reserves? b. How much new amount of loan will this bank be able to create because ofthe excess reserves? c. How much new amount of loan the entire banking system be able to create because of the excess reserves? cl. What would be the excess reserves of this bank after the RRR is changed to 8%? e. How much new amount ofloan will this bank be able to create with the RRR of 8%? f. How much new amount of loan the entire banking system be able to create because of the excess reserves? 6. What is the Federal Reserve System, and what is its purpose? (8) 7. List and explain the primary tools does the Fed have for conducting monetary policy. (8) 8. What is velocity of money? List two major determinants of velocity of money. (4) 9. Assume GDP is currently $10,800 billion per year and the quantity of money is $540 billion. a. What is the velocity of money? (4) b. The nation collectively holds enough money to finance how many days, worth of GDP expenditure? (4)