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.,
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.,
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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.
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