1. European Central Bank
Examine the European Central Bank website at http://www.ecb.int and answer the following questions:

1. What is the principle objective of the ECB?
   
   
2. What is the ECBs current inflation objective?
   
   
3. What are the benefits of price stability?
   
   
4. Describe the transmission mechanism of ECB policy.
   
   

2. Paper Money in the United States
Examine the Federal Reserve Board of San Franciscos discussion of the history of paper money in the United States at http://www.frbsf.org/publications/federalreserve/annual/1995/history.htmland answer the questions below.

1. What was the first paper money in North American and when was it created?
   
   
2. What backed the Continental currency?
   
   
3. When was the first Bank of the United States established?
   
   
4. What was the free banking era?
   
   
5. What currency was used during the Civil War?
   
   
6. Are todays Federal Reserve notes backed by gold?