The supply of money in the economy.

Question

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Answer 1

Question

Chapter 16, Problem 1CQQ

To determine

The supply of money in the economy.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is the correct answer.

Explanation of Solution

Any commodity or item that a community accepts as payment for the goods and services is known as money. It can be any commodity that the consumer gives in exchange for goods and services. The banks are financial institutions that play an important role in a financial market.

Option (c):

The use of the lines of credit which are accessible with credit card cannot be considered as money supply because it is a debt instrument and there is no supply of money. Therefore, the lines of credit accessed through credit card are not included in the money supply. Thus, option 'c' is correct.

Option (a):

The metal coins are a form of money that is used by an economy for the purpose of the exchange of goods and services. They are accepted as payment for the goods and services. Hence, they are included in the money supply. Thus, option 'a' is incorrect.

Option (b):

Paper currency is a widely accepted form of money all over the world. Hence, it is included in the money supply of the economy. Thus, option 'b' is incorrect.

Option (d):

Bank balances that are accessible with debit cards are the savings of the customers and they are included in the money supply of the economy. When the bank balance increases, the money supply increases, and vice versa. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Money: Money is any item that is accepted as payment for the goods and services provided by an economy.

Banks: Banks are financial institutions that accept deposits of money from the general public and use it to provide loans to the public.

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02:18

Students have asked these similar questions

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. What the heck is this GDP thingy? It is Thursday afternoon, just a few days before the holiday season starts in your region, and you decided to visit your uncle Chao who owns a local delivery company. While sitting in the living room watching the evening news with your uncle, you heard the news reporter stating the following with an optimistic tone: "According to recent studies, gross domestic product (GDP) is rising due to an increase in consumer spending. The increase in spending was due to an increase in consumer confidence because the job market has shown a positive increase in both employment and income." Immediately, your uncle Chao looked at you with some confusion on his face and asked: What the heck is GDP, and why does the news dude seem excited about its increase? Does this “good” change in this GDP thingy have any effect on my delivery business? How? Do I need to do something different to prepare for the rise in GDP? How?

3. I need people who don’t want me! As an operations manager at a factory that produces manual tools, you were tasked with preparing a new site for expansion. The plan is to start production in the new location within 6 months from the current date. The new location requires 100 workers to operate fully. The workers you need don’t require any form of education or special skills because the tasks at the factory are simple and straightforward. In other words, you typically hire lower-skilled workers. In recent years, your company has been having problems finding workers who meet those criteria because the demand for them is so high. While sitting in your office, your teammate, Alejandra, walked to your office and said, "Have you heard the recent news about the economy? They said that investment has declined, and government spending has declined too. They also said that GDP is expected to shrink in the next 6 to 10 months. I wonder what is next." Then, she looked at you and said: How…

Answer 2

Question

Chapter 16, Problem 1CQQ

To determine

The supply of money in the economy.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is the correct answer.

Explanation of Solution

Any commodity or item that a community accepts as payment for the goods and services is known as money. It can be any commodity that the consumer gives in exchange for goods and services. The banks are financial institutions that play an important role in a financial market.

Option (c):

The use of the lines of credit which are accessible with credit card cannot be considered as money supply because it is a debt instrument and there is no supply of money. Therefore, the lines of credit accessed through credit card are not included in the money supply. Thus, option 'c' is correct.

Option (a):

The metal coins are a form of money that is used by an economy for the purpose of the exchange of goods and services. They are accepted as payment for the goods and services. Hence, they are included in the money supply. Thus, option 'a' is incorrect.

Option (b):

Paper currency is a widely accepted form of money all over the world. Hence, it is included in the money supply of the economy. Thus, option 'b' is incorrect.

Option (d):

Bank balances that are accessible with debit cards are the savings of the customers and they are included in the money supply of the economy. When the bank balance increases, the money supply increases, and vice versa. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Money: Money is any item that is accepted as payment for the goods and services provided by an economy.

Banks: Banks are financial institutions that accept deposits of money from the general public and use it to provide loans to the public.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

02:18

Answer 3

Question

Chapter 16, Problem 1CQQ

To determine

The supply of money in the economy.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is the correct answer.

Explanation of Solution

Any commodity or item that a community accepts as payment for the goods and services is known as money. It can be any commodity that the consumer gives in exchange for goods and services. The banks are financial institutions that play an important role in a financial market.

Option (c):

The use of the lines of credit which are accessible with credit card cannot be considered as money supply because it is a debt instrument and there is no supply of money. Therefore, the lines of credit accessed through credit card are not included in the money supply. Thus, option 'c' is correct.

Option (a):

The metal coins are a form of money that is used by an economy for the purpose of the exchange of goods and services. They are accepted as payment for the goods and services. Hence, they are included in the money supply. Thus, option 'a' is incorrect.

Option (b):

Paper currency is a widely accepted form of money all over the world. Hence, it is included in the money supply of the economy. Thus, option 'b' is incorrect.

Option (d):

Bank balances that are accessible with debit cards are the savings of the customers and they are included in the money supply of the economy. When the bank balance increases, the money supply increases, and vice versa. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Money: Money is any item that is accepted as payment for the goods and services provided by an economy.

Banks: Banks are financial institutions that accept deposits of money from the general public and use it to provide loans to the public.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

02:18

Answer 4

Question

Chapter 16, Problem 1CQQ

To determine

The supply of money in the economy.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is the correct answer.

Explanation of Solution

Any commodity or item that a community accepts as payment for the goods and services is known as money. It can be any commodity that the consumer gives in exchange for goods and services. The banks are financial institutions that play an important role in a financial market.

Option (c):

The use of the lines of credit which are accessible with credit card cannot be considered as money supply because it is a debt instrument and there is no supply of money. Therefore, the lines of credit accessed through credit card are not included in the money supply. Thus, option 'c' is correct.

Option (a):

The metal coins are a form of money that is used by an economy for the purpose of the exchange of goods and services. They are accepted as payment for the goods and services. Hence, they are included in the money supply. Thus, option 'a' is incorrect.

Option (b):

Paper currency is a widely accepted form of money all over the world. Hence, it is included in the money supply of the economy. Thus, option 'b' is incorrect.

Option (d):

Bank balances that are accessible with debit cards are the savings of the customers and they are included in the money supply of the economy. When the bank balance increases, the money supply increases, and vice versa. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Money: Money is any item that is accepted as payment for the goods and services provided by an economy.

Banks: Banks are financial institutions that accept deposits of money from the general public and use it to provide loans to the public.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

02:18

Answer 5

Chapter 16, Problem 1CQQ

To determine

The supply of money in the economy.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is the correct answer.

Explanation of Solution

Any commodity or item that a community accepts as payment for the goods and services is known as money. It can be any commodity that the consumer gives in exchange for goods and services. The banks are financial institutions that play an important role in a financial market.

Option (c):

The use of the lines of credit which are accessible with credit card cannot be considered as money supply because it is a debt instrument and there is no supply of money. Therefore, the lines of credit accessed through credit card are not included in the money supply. Thus, option 'c' is correct.

Option (a):

The metal coins are a form of money that is used by an economy for the purpose of the exchange of goods and services. They are accepted as payment for the goods and services. Hence, they are included in the money supply. Thus, option 'a' is incorrect.

Option (b):

Paper currency is a widely accepted form of money all over the world. Hence, it is included in the money supply of the economy. Thus, option 'b' is incorrect.

Option (d):

Bank balances that are accessible with debit cards are the savings of the customers and they are included in the money supply of the economy. When the bank balance increases, the money supply increases, and vice versa. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Money: Money is any item that is accepted as payment for the goods and services provided by an economy.

Banks: Banks are financial institutions that accept deposits of money from the general public and use it to provide loans to the public.

Answer 6

Chapter 16, Problem 1CQQ

To determine

The supply of money in the economy.

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is the correct answer.

Explanation of Solution

Any commodity or item that a community accepts as payment for the goods and services is known as money. It can be any commodity that the consumer gives in exchange for goods and services. The banks are financial institutions that play an important role in a financial market.

Option (c):

The use of the lines of credit which are accessible with credit card cannot be considered as money supply because it is a debt instrument and there is no supply of money. Therefore, the lines of credit accessed through credit card are not included in the money supply. Thus, option 'c' is correct.

Option (a):

The metal coins are a form of money that is used by an economy for the purpose of the exchange of goods and services. They are accepted as payment for the goods and services. Hence, they are included in the money supply. Thus, option 'a' is incorrect.

Option (b):

Paper currency is a widely accepted form of money all over the world. Hence, it is included in the money supply of the economy. Thus, option 'b' is incorrect.

Option (d):

Bank balances that are accessible with debit cards are the savings of the customers and they are included in the money supply of the economy. When the bank balance increases, the money supply increases, and vice versa. Thus, option 'd' is incorrect.

Economics Concept Introduction

Concept introduction:

Money: Money is any item that is accepted as payment for the goods and services provided by an economy.

Banks: Banks are financial institutions that accept deposits of money from the general public and use it to provide loans to the public.

Answer 7

Chapter 16, Problem 1CQQ

To determine

The supply of money in the economy.

Answer 8

Expert Solution & Answer

Answer to Problem 1CQQ

Option 'c' is the correct answer.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Any commodity or item that a community accepts as payment for the goods and services is known as money. It can be any commodity that the consumer gives in exchange for goods and services. The banks are financial institutions that play an important role in a financial market.

Option (c):

The use of the lines of credit which are accessible with credit card cannot be considered as money supply because it is a debt instrument and there is no supply of money. Therefore, the lines of credit accessed through credit card are not included in the money supply. Thus, option 'c' is correct.

Option (a):

The metal coins are a form of money that is used by an economy for the purpose of the exchange of goods and services. They are accepted as payment for the goods and services. Hence, they are included in the money supply. Thus, option 'a' is incorrect.

Option (b):

Paper currency is a widely accepted form of money all over the world. Hence, it is included in the money supply of the economy. Thus, option 'b' is incorrect.

Option (d):

Bank balances that are accessible with debit cards are the savings of the customers and they are included in the money supply of the economy. When the bank balance increases, the money supply increases, and vice versa. Thus, option 'd' is incorrect.