Thursday, November 27, 2008

Monetary Policy - Questions for Further Study


1. The island of Yap is known for an unusual form of money. Where is Yap? What is its unique money? Would you classify it as commodity money or fiat money?

2. Do the components of the M1 money supply serve all three functions of money? How about M2 and M3? What is the relationship between the different definitions of the money supply and their abilities to fulfill the functions of money?

3. Is the Federal Reserve System financed by general tax revenues or does it receive income from other sources? How much of the federal government annual budget is devoted to the support of the Federal Reserve System?

1 comment:

  1. Does the FED always have to dig into its monetary policy measures pockets to correct disequilibrium. What is he significance of fiscal policy with the "National debt" constantly on the rise