SI session 1

•Citadelia residents hold 500,000 citadels as currency

•Deposit 500,000 citadels in the banks

•Reserve Requirement = 10%

• 5500000

• 500000

• 1000000

• 6000000

You are selling your car for 2000 dollars on ebay. What function of money are you using

Currency 1717.7, Demand Deposits 1564.2, Other checkable deposits 669.4, Saving deposits 9908.7, Small denomination time deposits 582.1, Money Market Mutual Funds 990.1. What's M1 ?

• 3951.3

• 1543.2

• 3281.9

• 12207.8

medium of exchange

• Security that pays interest over terms ranging from two to ten years.

• Security that matures in a year or less

• Money is used in exchange for goods and services needed by individuals, businesses, and governments.

• Money is a common measure of what something is worth or price of a good or service

What is the effect of a contractionary monetary policy on interest rates?

• Interest rates decrease

• Interest rates remain unchanged

• Interest rates increase

• Interest rates fluctuate randomly

Answer explanation

A contractionary monetary policy involves reducing the money supply, leading to higher interest rates as borrowing becomes more expensive.