Problem 2.1: Describe the money market. [Solution]

Problem 2.2: Draw a diagram depicting the money market. [Solution]

Problem 2.3: Describe what happens to the value of money and the money market when the Fed increases the money supply. Diagram the change. [Solution]

Problem 2.4: Describe the quantity theory of money. [Solution]

Problem 2.5: How are the velocity of money, the money supply, and the nominal GDP related? [Solution]