Gold is included in which of the following measures of the money supply of the United States? Select one: OA. M2 but not M1. O B. M1 but not M2. O C. Both M1 and M2. OD. Neither M1 nor M2.
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- Checking account balances are included in Select one: O a. neither M1 nor M2. O b. both M1 and M2. O c. M1 only. O d. M2 only. Clear my choiceWhich of the following is true about money in the colonies? O Whether with friends or strangers, people found bartering to be convenient O Thomas Jefferson thought the use of money was oppressive O Money tended to change in such a way as to ease and thereby promote commerce O There was no such thing as commodity money or fiat moneyHow can a commercial bank "create" money? Select one: O a. by making loans O b. by increasing the rate of inflation O c. by issuing its own Central Bank bonds O d. by selling government Treasury bills to the commercial banks O e. by selling some of its foreign-currency reserves for domestic currency
- Which of the following represents an action by the central bank designed to increase the money supply? Select one: O a. an increase in the discount rate O b. an increase in the required reserve ratio O .buying government securities O d. a decrease in tax ratesIf the Federal Reserve decided to include virtual money like bitcoins in its measure of the money supply, what would be the effect on M1 or M2? O A. M2 would rise but M1 would remain constant. B. M1 would rise and M2 would remain constant. C. M1 would fall. O D. M1 would rise.Sarafina withdraws $450 from her saving account and places the money in her wallet. This transaction will Select one: O a. not change M1 and decrease M2. Ob. increase M1 and not change M2. OC. increase both M1 and M2. O d. decrease both M1 and M2. Next
- The difference between M1 and M2 is given bywhich of the following?a. M1 includes currency, coins, gold, and silver,whereas M2 does not contain gold and silver.b. M1 is made up of currency and checkabledeposits, whereas M2 contains M1 plus savingsdeposits and small time deposits.c. M1 is limited to checkable deposits, whereasM2 contains currency.d. M1 includes only currency, whereas M2contains M1 plus checkable deposits.For each of the following events, choose if it is likely to increase, decrease or not affect the money supply in Canada. a. The Bank of Canada purchases Canadian dollars (paid with their stock of US dollars) and use the Canadian dollars to purchase bonds from commercial banks. O Increase No Effect O Decrease b. The Bank of Canada purchase US dollars with its stock of Euros. O Increase No Effect Decrease c. The Canadians loose confidence in the banking system and start holding a larger fraction of their money in the form of currency outside banks. Decrease Increase No EffectWhich of the following would NOT result in a decreased money supply? Select one: O a. Decrease in the reserve ratio b. Increase in the currency ratio Decrease in the money multiplier d. Decrease in the monetary base C.
- deposits are S800 billion, and excess reserves total $0.8 billion, then the meney supply is 1. If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable hillion. 2. If the required reserve ratio is 10 pereent, curreney in cireulation is $400 billion, checkable deposits are S800 billion, and excess reserves total SO 8 billion, then the currency-deposit ratio is...Let the reserve requirement be 15 percent for deposits. Assume there are not excess reserves. If the currency demand equals 40 percent of deposits and total reserves equal $60 billion, then an open markey sale of $1.5 billion in government bonds should Reduce the money supply from $160 billion to $156 billion Increase the money supply from $400 billiion to $410 billion Reducce the money supply from $400 billion to $390 bilion Reduce the money supply from $560 billion to $546 billionJone currently has $6,000 in her savings account and $2,000 in her checking account at the local bank. Instructions: Use a positive number to represent an increase and a negative number to represent a decrease. a. Suppose she withdraws $550 in cash from her savings account. By what dollar amount does the countrys money supply (M and M2) change as a result of Jane's actions? Change in M: $ Change in M2$ b. Now suppose instead that Jane withdraws $550 from her checking account and uses $330 of this money to pay her federal income tax. After that, she uses $140 to buy a set of used golf clubs from her neighbor who deposits it into his checking account. Finally, she deposits the remaining cash from the $550 withdrawal into her savings account. By what dollar amount does the country's money supply change as a result of Jene's actions? Change in Mt: $ Change in M2: $
