1). Explain the Fed's three tools of monetary policy and how
each is used to change the money supply. Does each tool affect the
monetary base or the money multiplier?
2). Suppose everything else equal; a) the Central Bank raises
the reserve requirement to 20 percent, b) the currency deposit
ratio rises to 60 percent. Which development, a) or b) will affect
the money multiplier more? Why?
3). Suppose the Central Bank of Turkey starts to pay interest on
reserves....