Rules: You may work with only your partner The answer must be written on the board. Do not shout out answers. You only get TWO guesses per question. After each round is complete, pass the board back to the next pair on your team. The team that has the most money at the end of the game is the winning team. When it’s not your turn on the board, you MUST ATTEMPT each question on your own paper. This will be collected at the end of the game.

Jeopardy! LET’S GO!

Jeopardy! $100 $200 $300 $400 Intro to Money Final Jeopardy Intro to Money Money Market & Monetary Policy Three Tools of Monetary Policy Market for Loanable Funds Potpourri $100 $200 $300 $400

Intro to Money $100 This is the system where goods and services are traded directly with no money exchanged:

Intro to Money $100 The system where goods and services are traded directly with no money exchanged? The Barter System

Intro to Money $200 These are the three functions of money:

Intro to Money $200 These are the three functions of money: A Medium of Exchange A Unit of Account A Store of Value

Intro to Money $300 Given you lend out $100 for 1 year at 5% interest, the borrower will pay you this much next year.

Intro to Money $300 Given you lend out $100 for 1 year at 5% interest, the borrower will pay you this much next year. $105

Intro to Money $400 This type of money is considered to have the highest liquidity.

Intro to Money $400 This type of money is considered to have the highest liquidity. M1 Money

Money Market & Monetary Policy $100 The Money Demand Curve has this shape:

Money Market & Monetary Policy $100 The Money Demand Curve has this shape: Downward Sloping

Money Market & Monetary Policy $200 For this reason, the money supply curve is vertical

Money Market & Monetary Policy $200 For this reason, the money supply curve is vertical. The Fed sets and adjusts the money supply

Money Market & Monetary Policy $300 If the FED shrinks the money supply, this will happen to the AD curve

Money Market & Monetary Policy $300 If the FED shrinks the money supply, this will happen to the AD curve Shift Left

Money Market & Monetary Policy $400 These are the entire sequence of what happens to the market given an increase in the Money Supply

Money Market & Monetary Policy $400 Describe the entire sequence of what happens to the market given an increase in the Money Supply 1. Interest Rates Decrease 2. Investment Increase 3. AD, GDP and PL increase

Three Tools of Monetary Policy $100 These are the FED’s three tools of monetary policy:

Three Tools of Monetary Policy $100 These are the FED’s three tools of monetary policy: Set the Reserve Ratio Set the Discount Rate Open Market Operations

Three Tools of Monetary Policy $200 We use this formula to calculate the Money Multiplier

Three Tools of Monetary Policy $200 We use this formula to calculate the Money Multiplier 1/(Reserve Requirement)

Three Tools of Monetary Policy $300 To counteract an inflationary gap, the FED could use this strategy:

Three Tools of Monetary Policy $300 To counteract an inflationary gap, the FED could use this strategy Raise the reserve ratio, increase the discount rate, or sell securities on the open market.

Three Tools of Monetary Policy $400 If the reserve requirement is .2 and the FED buys $10 million bonds, this will happen to the money supply

Three Tools of Monetary Policy $400 If the reserve requirement is .2 and the FED buys $10 million bonds, this will happen to the money supply Increase by $50 million

Market for Loanable Funds $100 This is the definition for the Federal Funds Rate?

Market for Loanable Funds $100 This is the definition for the Federal Funds Rate? the interest rate that banks charge one another for one-day loans of reserves.

Market for Loanable Funds $200 You lend out $100 with 15% interest. Inflation is 12% that year. This is the real interest rate from that transaction

Market for Loanable Funds $200 You lend out $100 with 15% interest. Inflation is 12% that year. This is the real interest rate from that transaction 3%

Market for Loanable Funds $300 You lend out $100 with 10% interest. Inflation is 13% that year. This person (the borrower or the lender) benefits from this transaction

Market for Loanable Funds $300 You lend out $100 with 10% interest. Inflation is 13% that year. This person (the borrower or the lender) benefits from this transaction The Borrower

Market for Loanable Funds $400 Daily Double Draw and correctly label a loanable funds market. Then draw what will happen given a decrease in deficit spending by the government

Market for Loanable Funds $400

Potpourri $100 This is the strongest muscle in the human body:

Potpourri $100 This is the strongest muscle in the human body: Tongue

Potpourri $200 This is a rock regularly eaten by humans:

Potpourri $200 This is a rock regularly eaten by humans: Salt

Potpourri $300 The diameter of earth, rounded to the nearest thousand.

Potpourri $300 The diameter of earth, rounded to the nearest thousand. 8000 miles (7918 to be exact)

Potpourri $400 This is what the “WD” in WD-40 stands for

Potpourri $400 In the product WD-40, the “W” stands for “Water.” What does the “D” stand for? Water Displacement

Final Jeopardy In order to finance the increase in government spending on national defense, the government borrows funds from the public. Using a correctly labeled graph of the loanable funds market, show the effect of the government’s borrowing on the real interest rate.

Final Jeopardy