Macroeconomic(Money Supply)

M1 includes

• demand deposits.

• currency.

• traveler's checks.

• All of the above are correct.

________ money could be used for some other purpose other than as a medium of exchange, for example, gold coins could be melted down and turned into gold jewelry.

• Electronic

• Commodity

• Fiat

• Paper

Of the following, the largest is

• M1.

• demand deposits.

• M2.

• money market deposit accounts.

If an individual moves money from a savings deposit account to a money market deposit account,

• M1 increases and M2 decreases.

• M1 stays the same and M2 stays the same.

• M1 stays the same and M2 increases.

• M1 decreases and M2 stays the same.

What is the M1 money supply?

• $215 billion

• $226 billion

• $216 billion

• $301 billion

The banking system has $10 million in reserves, the reserve requirement is 20 percent,and there are no excess reserves.The public holds $10 million in cash.Then bankers decide that it is prudent to hold some excess reserves, and so begin to hold 25 percent of deposits in the form of reserves. At the same time, the public decides to withdraw $5 million in currency from the banking system. Other things the same, these actions will cause the money supply to

• fall by $25 million

• change forms, but not size

• fall by $10 million

• fall by $35 million