1. What is the short-term effect of an increase or decrease in the money

supply?

2. What is the prime rate?

3. What does it mean for the Fed to “monetize the debt”?

4. What is the real rate of interest and why is it used?

5. How do the issues of timing and burden impact the Fed’s monetary policy?

6. What effect do low interest rates have on future allocations?

7. What effect do high interest rates have on future allocations?

8. What do these money supplies consist of?a. M1:

b. M2: