The key to a stable financial system is elasticizing the supply of reserves, through Federal Reserve discounting of commercial paper. What does this mean, and exactly what problem does it solve?i

What if the ER/D ratio is counter-cyclical, meaning that it goes down when the business cycle is expanding, and it goes up when the business cycle is contracting? Why might this be true? (And in fact, it is true!) How would this affect the business cycle itself? Is this a problem inherent to capitalism? What can the Fed do about it?

iii) Under a gold standard, the price of gold (in terms of dollars) cant change. But money is a veil, as is commonly said in introductory economics. Whats economically relevant is the change in golds price relative to other non-gold things. How does this play out, say, if suddenly theres an increase in demand for gold? How would the economy adjust? What systemic problems/crises might this trigger?