1. The Central Bank of Indonesia sees the potential of the latest credit card technology to facilitate transactions in the community. Then, the central bank change their regulations to decide to expand the availability of credit cards so that people have to hold less cash. a) How does this event affect the demand for money?

23. Identify the four major methods the Fed uses to control the money supply. Give two examples of situations in which the Fed might use one of these methods and explain why that method is best for the given situation.

1. Explain the differences between commodity money and fiat money. What are the major disadvantages of commodity money?

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1. Which of the following would NOT cause a rise in the money supply (assume ceteris paribus)? A. An increase in government spending financed by borrowing from the central bank. B. The centFal bank imposes a reserve requirement (reserve ratio) on banks above their current ratio. C. A rise in demand for money and the central bank does not change interest rates. D. The central bank agreeing to swap toxic assets for cash (quantitative easing). E. All of the above.

The money stock includes all of the following EXCEPTa. metal coins.b. paper currency.c. lines of credit accessible with credit cards.d. bank balances accessible with debit cards