4. What components of money are counted as part of M1? A) currency, M2 and checking accounts. B) currency, travelers' checks, checking accounts and M2 O c. C) C) currency, travelers' checks and checking accounts. D) currency, travelers' checks and money market accounts
4. What components of money are counted as part of M1? A) currency, M2 and checking accounts. B) currency, travelers' checks, checking accounts and M2 O c. C) C) currency, travelers' checks and checking accounts. D) currency, travelers' checks and money market accounts
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
Section: Chapter Questions
Problem 12PA
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4. What components of money are counted as part of M1?
A) currency, M2 and checking accounts.
B) currency, travelers' checks, checking accounts and M2 O c. C)
C) currency, travelers' checks and checking accounts.
D) currency, travelers' checks and money market accounts
10. Explain what will happen to the money multiplier process if there is an increase in the reserve requirement?
A) An increase in the reserve requirement means that banks will be less likely to have your money when you demand it, but it would increase the money multiplier
B) An increase in the reserve requirement means that banks will be more likely to have your money when you demand it, increasing the money multiplier
C) Since a greater portion of each deposit is being lent out, the multiplier will increase. This means more loans lent and more economic growth .
D) Since a smaller portion of each deposit is being lent out, the multiplier will decrease. This means fewer loans lent and less economic growth.
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