1a.) GRAPH and Explain what would occur if the Fed sold 1 million dollars worth of government securities to an agent when the simple money multiplier is 5. Be sure to mention what happens to the number of loans made and interest rates.
b.)Graph and explain what would happen to the rest of the economy. Be sure to mention real GDP, price level, and unemployment.
4a.)Explain what fiat money is and how it differs from commodity money.
b.) What is one advantage and disadvantage of each of the above types?
c.) Explain why money was invented in the first place.
5.) Explain what the Federal Reserve is, what its function is, and why this is important for the average American?
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