The 7 Functions of the FED

FED functions:

1. issuing paper currency
2. setting reserve requirement and holding reserves of banks
3. lending money to banks and charges them interest
4. check clearing services for banks
5. acting as personal bank for the government
6. supervises member banks
7. controls money supply in the economy. 

Three types of multiple deposit expansion:

Type 1: calculate the initial change in excess reserves. (the amount a single bank can loan from the initial deposit)

Type 2: calculate the change in loans in the banking system.

Type 3: calculate the change in money supply

Type 4: calculate the change in demand deposit