Question 1
In a fractional reserve banking system, what is the primary purpose of holding excess reserves?
Question 2
Which of the following best describes the money multiplier effect?
Question 3
If the central bank increases the reserve requirement, what is the likely impact on the money supply?
Question 4
What is the primary function of money that allows it to serve as a medium of exchange?
Question 5
In the context of money supply, what does M2 include that M1 does not?
