After reading this chapter, you should be able to

17.1 Define money and discuss the functions of money.

17.2 Discuss the definitions of the different measures of the money supply.

17.3 Explain how banks create money.

17.4 Describe the money multiplier.

17.5 Describe the Federal Reserve System.

17.6 Explain the tools that the Federal Reserve uses to manage the money supply.

17.7 Discuss bank failures in the United States.