2. Which of the following best describes fiat money! (A) Money that is backed by a commodity such as gold (B) Money that is backed by the government that issued it (C) U.S. dollars held in foreign financial institutions (D) Money that is held in demand deposits that is not included in the M1 or M2 money supplies

2. Which of the following best describes fiat money! (A) Money that is backed by a commodity such as gold (B) Money that is backed by the government that issued it (C) U.S. dollars held in foreign financial institutions (D) Money that is held in demand deposits that is not included in the M1 or M2 money supplies

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Consider the following data (all values are in billions of dollars): (b) Currency Transactional deposits Bank reserves June 1930 June 1931 June 1932 $ 3.681 3.995 4.959 21.612 19.888 15.490 3.227 3.307 2.829 (a) Calculate the values for each period for the currency-deposit ratio, the ratio of total reserves to deposits, the monetary base, M1, and the money multiplier. Can you explain why the currency-deposit ratio and the ratio of total reserves to deposits moved as they did between 1930 and 1932(Great depression era)?
Suppose a nation's banking system has the following account Saving Account $1,200 Checking Account 810 Traveler's Check 35 240 1,090 Cash Credit Card Money Market Mutual Funds What's the value of M1 in this banking system? Your Answer: 910
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Use the table to calculate M1 and M2. Currency 1050 Savings deposits 5500 Small-denomination time. 1000 deposits Traveler's checks 10 Non-institutional money 800 market funds Institution-only money market 1800 funds Transactions deposits 1140 M1 = A ; M2 = = A/ (write numbers only, no commas)
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Answer the question below using the following information (all figures in billions of dollar) Given the data below Currency held outside banks $1000 Demand Deposit $2000 Saving deposit $1200 Money market fund $700 Time deposit $800 1 - The value of M1 equal 2 - The value of M2 equal
Answer the question below using the following information (all figures in billions of dollar) Given the data below Currency held outside banks $1000 Demand Deposit $2000 Saving deposit $1200 Money market fund Time deposit $700 $800 1 - The value of M1 equal 2 - The value of M2 equal В I III !!
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