10. All of the following are part of M1 money except?A. CurrencyB. Demand depositsC. Other checkable depositsD. Money market mutual funds share11. In quantity theory of money, changes in quantity of money result in?A. Increase in outputB. Increase in pricesC. No significant changeD. None of the above12. What happens if the government deficit is financed by an increase in bond holdingsby the public?A. There is no effect on the monetary bond.B. The monetary base increasesC. Money supply increasesD. None of the above13. Which factor affects demand for money negatively?A. WealthB. IncomeC. Liquidity of other assetsD. Riskiness of other assets

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10. All of the following are part of M1 money except? A. Currency B. Demand deposits C. Other checkable deposits D. Money market mutual funds share

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

10. All of the following are part of M1 money except?
A. Currency
B. Demand deposits
C. Other checkable deposits
D. Money market mutual funds share
11. In quantity theory of money, changes in quantity of money result in?
A. Increase in output
B. Increase in prices
C. No significant change
D. None of the above
12. What happens if the government deficit is financed by an increase in bond holdings
by the public?
A. There is no effect on the monetary bond.
B. The monetary base increases
C. Money supply increases
D. None of the above
13. Which factor affects demand for money negatively?
A. Wealth
B. Income
C. Liquidity of other assets
D. Riskiness of other assets

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