Bundle: Macroeconomics, 13th + Aplia, 1 Term Printed Access Card
13th Edition
ISBN: 9781337742375
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 12, Problem 6WNG
To determine
The checkable deposit.
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Which of the following are M1, M2, M3, or not money at all?
A credit card’s unused balance:
A checking account:
Stocks and bonds:
A savings accounts:
A $100 bill:
Antique furniture:
Why can fiat money be successfully used as a currency despite the fact that it has no intrinsic value backing it up?
If currency in circulation is $1097 billion, checkable deposits are $1417 billion, and total reserves are $444 billion, what is the money multiplier (m)? Round your answer to two decimal places.
Chapter 12 Solutions
Bundle: Macroeconomics, 13th + Aplia, 1 Term Printed Access Card
Ch. 12.2 - Prob. 1STCh. 12.2 - Prob. 2STCh. 12.2 - Prob. 3STCh. 12.3 - Prob. 1STCh. 12.3 - Prob. 2STCh. 12.3 - Prob. 3STCh. 12.4 - Prob. 1STCh. 12.4 - Prob. 2STCh. 12.4 - Prob. 3STCh. 12 - How much money did you make last year? What is...
Ch. 12 - Prob. 2QPCh. 12 - Prob. 3QPCh. 12 - Prob. 4QPCh. 12 - Prob. 5QPCh. 12 - Prob. 6QPCh. 12 - Prob. 7QPCh. 12 - Prob. 8QPCh. 12 - Prob. 9QPCh. 12 - Prob. 10QPCh. 12 - Prob. 11QPCh. 12 - Prob. 12QPCh. 12 - Prob. 13QPCh. 12 - Prob. 14QPCh. 12 - Prob. 15QPCh. 12 - Prob. 16QPCh. 12 - Prob. 17QPCh. 12 - Prob. 1WNGCh. 12 - Prob. 2WNGCh. 12 - Prob. 3WNGCh. 12 - Prob. 4WNGCh. 12 - Prob. 5WNGCh. 12 - Prob. 6WNGCh. 12 - Prob. 7WNGCh. 12 - Prob. 8WNGCh. 12 - Prob. 9WNGCh. 12 - Prob. 10WNG
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- M1 and M2 are two measures of money supply. M1 includes only the most liquid forms of money like currency, checking account deposits, and traveler’s checks. M2 includes all of M1 along with some less liquid forms of money like savings accounts and money market deposits. Suppose you transfer $2,000 from your mutual fund account to your checking account. What is the immediate impact of this transfer on M1 and M2 as per the economy?arrow_forwardAssuming a reserve requirement of 20%, if the central bank of a country injects an additional $10,000 in reserves into the banking system, how much new money can the banking system create?arrow_forwardOne of the features of money is its store of value. However, most people do not hold their wealth as currency. Given that currency is the most liquid type of asset, why don't people hold all their wealth as currency?arrow_forward
- If the actual reserve ratio is 16%, what is the money multiplier? Include up to two decimal places, if needed.arrow_forwardWhen currency is equal to $100 billion and reserves are equal to $200 billion, and we know that the money multiplier is equal to 2.5, then the money supply will be equal toarrow_forwardYou just earned $25.000 which you deposit it in a bank account, How much can fractional-reserve banking potentially increase the money supply if only 10% of the deposit is kept in reserve by the bank.arrow_forward
- If real GDP equals $2,550 billion, M1 equals $10,000 billion and the ratio of the deflators equals 2, what would the velocity of money equal 0.51 0.42 2.85 0.35 2.38arrow_forwardOver the years, the Federal Reserve Banks have printed many billions of dollars more in currency than U.S. households, businesses, and fifinancial institutions now hold. Where is this “missing” money? Why is it there?arrow_forwardAccording to table below (all figures are in billions of dollars)Currency held outside banks $ 800Demand Deposits 1000Traveler's Checks 100Other checkable deposits 200Savings accounts 300Money market accounts 100Other near monies 200a) What is the value of M1?b) What is the value of M2 ?arrow_forward
- Suppose you deposit $1,900 cash into your checking account. By how much will checking deposits in the banking system increase as a result when the required reserve ratio is 0.50? The change in checking deposits is equal to: $ (enter your result rounded to the nearest dollar).arrow_forwardWhat are the three basic functions of money? Describe how rapid inflation can undermine money’s ability to perform each of the three functions.arrow_forward
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