econ ch. 11

Use the following table to answer this question The information in the table pertains to an imaginary economy. What is the M1 money supply? A. $215 billion B. $216 billion C. $226 billion D. $301 billion

$226 billion M1 includes; demand deposits currency other checkable deposits travellers checks

Which of the following is not included in M1? A. a $5 bill in your wallet B. $100 in your checking account C. $500 in your savings account D. All of the above are included in M1.

. $500 in your savings account included in M1 are: cash, demand deposits, and checking deposits M2 includes savings account deposits and various time deposits

Use the following table to answer this question The information in the table pertains to an imaginary economy. What is the M2 money supply? A. $125 billion B. $296 billion C. $351 billion D. $431 billion

351 billion M2 includes; M1 savings deposits small time deposits money market mutual funds misc categories of m2

Which of the following statements is correct? A. All items that are included in M1 are included also in M2. B. All items that are included in M2 are included also in M1. C. Credit cards are included in both M1 and M2. D. Savings deposits are included in both M1 and M2.

All items that are included in M1 are included also in M2.

The Federal Reserve___. A. was created in 1913. B. has more than one specific job to perform. C. is an example of a central bank. D. All of the above are correct.

All of the above are correct.

Which of the following is a store of value? A. currency B. U.S. government bonds C. fine art D. All of the above are correct.

All of the above are correct.

The Federal Reserve does all except which of the following? A. It controls the supply of money. B. It acts as a lender of last resort to banks. C. It makes loans to large business firms. D. It tries to ensure the health of the banking system.

It makes loans to large business firms.

Money market mutual funds are included in____. A. M1 but not M2. B. M1 and M2. C. M2 but not M1. D. neither M1 nor M2.

M2 but not M1.

Which of the following best illustrates the unit of account function of money? A. You list prices for candy sold on your Web site, www.sweettooth.com, in dollars. B. You pay for your theater tickets with dollars. C. You keep 6 ounces of gold in your safe-deposit box at the bank for emergencies. D. None of the above is correct.

You list prices for candy sold on your Web site, www.sweettooth.com, in dollars.

Credit cards____. A. are included in M1 but not M2. B. are included in M1 and M2. C. are included in M2 but not M1 D. are not included in any measure of the money supply.

are not included in any measure of the money supply.

Which of the following items is included in the M2 definition of the money supply? A. credit cards B. money market mutual funds C. corporate bonds D. large time deposits

money market mutual funds

Currency includes_____. A. paper bills and coins. B. demand deposits. C. credit cards. D. Both (A) and (B) are correct.

paper bills and coins.

Economists use the term money to refer to____. A. all wealth. B. all assets, including real assets and financial assets. C. all financial assets, but real assets are not regarded as money. D. those types of wealth that are regularly accepted by sellers in exchange for goods and services.

those types of wealth that are regularly accepted by sellers in exchange for goods and services.

When we want to measure and record economic value, we use money as the____. A. liquid asset. B. medium of exchange. C. unit of account. D. store of value.

unit of account.

The measure of the money stock called M1 includes_____. A. wealth held by people in their checking accounts. B. wealth held by people in their savings accounts. C. wealth held by people in money market mutual funds. D. everything that is included in M2 plus some additional items.

wealth held by people in their checking accounts.