17. Use the following table to find the value of M1 in the economy of Theendisnear. (Note economists in Theendisnear define M1 in the same way as economists in the US.) Savings account deposits Cash in the hands of the public Small time deposits $522,000 $197,500 $450,000 $20,000 Checkable deposits $462,500 a. $1,182,000 b. $310,000 c. $660,000 d. $330,000 Required reserves

2. Assume the reserve requirement forya banking system is 20%. Under the typical assumptions corresponding with the money multiplfer, if an autonomous injection of $10,000 is made, how will it affect: (a) The initial required reserves of the individual bank into which this deposit is made? (b) The initial excess reserves of the individual bank into which this deposit is made? (c) Total deposits in the entire banking system after all of the repercussions of this injection?. (d) Are there any factors that might not allow this to work in the real world in the way economic theory might suggest? If so, what are they?

Sınav g Which of the following definitions of money refers to the coins and paper money held by the public? 10 11 O a. deposit money 19 20 Uygulama O b. M2 Kalan süre money in circulation O d. M2 Sonraki sayfa

2. Determine whether each of the following is included in both M1 and M2 or M2 only: a. a Connecticut quarter b. a savings account at a local savings bank c. a share draft account at a credit union d. money market deposit accounts e. American Express travelers' checks

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n the table below, the money supply, defined by M3, is equal to ........     Currency held by the non-bank public ($ billion) Current deposits at banks ($, billion) Other deposits at banks and other deposits held by other deposit -taking institutions ($, billion) 60 240 1500     Select one: a. 1200 billion b. 1800 billion c. 1500 billion d. 1740 billion

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2. Suppose your bank lowers its minimum balance requirement by $500. So you take $500 out of your checking account and invest in Money Market Mutual Funds. What is the overall effect on M1 and M2? a. M1 falls by $500, M2 rises by $500. b. M1 is unchanged, M2 is unchanged. c. M1 falls by $500, M2 is unchanged. d. M1 is unchanged, M2 rises by $500.

True or False:,1. Economists are not completely in agreement on what constitutes money for all purposes.,2. People use nontransaction accounts primarily because they generally pay higher interest rates than transaction deposits.,3. Most purists would argue that nontransaction deposits are near money assets but not money itself, because they are not a direct medium of exchange.,4. Liquidity refers to the ease with which one asset can be converted into another asset or goods and services.,5. Money market mutual funds have experienced tremendous growth over the last 20 years, but they are not highly liquid assets.,6. M1 is substantially larger than M2.,7. M1 includes currency, checkable deposits, and traveler’s checks, but not savings accounts.,8. People prefer to keep the bulk of their liquid assets as currency or in transaction accounts rather than in the form of savings accounts of various kinds.

5. Which of the following characteristics of money is associated with the base good being easily portable? a. Unit of account b. Store of value c. Medium of exchange