1. Explain how banks create money.

  2. What are the two ways in which the Bank of Canada can influence the money supply?

  3. Why might a banking crisis lead to a fall in the money supply?

  4. Explain the difference between portfolio and transactions theories of money demand.

  5. According to the Baumol–Tobin model, what determines how often people go to the bank? What does this decision have to do with money demand?

  6. In what way does the existence of near money complicate the conduct of monetary policy?