1. What power does the President of the United States have over the Federal Reserve?
2. Provide three reasons why open market operations are the Federal Reserves preferred means of controlling the money supply.
3. Make the case for and against an independent Federal Reserve.
4. Explain two concepts of central bank independence. Is the Fed politically independent? Why do economists think central bank independence is important?
5. Classify each of these transactions as an asset, a liability, or neither for each of the players in the money supply processthe federal reserve, banks, and depositors.

1. You get a $10,000 loan from the bank to buy an automobile.
2. You deposit $400 into your checking account at the local bank.
3. The Fed provides an emergency loan to a bank for $1,000,000.
4. A bank borrows $500,000 in overnight loans from another bank.
5. You use your debit card to purchase a meal at a restaurant for $100.