1) Given the quantitative theory of money:

a) what happens to real GDP if the money supply is cut in half, velocity is stable and prices are sticky?

b) what happens to prices if the money supply doubles under the classical model assuming that velocity is stable?

2) Compare and contrast the independence of the U.S Central Bank (Federal Reserve Bank) and the European Central Bank. Give the pros and cons of an independent central bank.

3) Explain the 4 tools of monetary policy and how they impact interest rates, financial markets, housing, and GDP.

4) Give 4 transmission mechanisms and explain how each impacts the financial markets and the overall economy.