Which of the following is not counted as part of M1?
A. coins
B. Federal Reserve notes or " paper money"
C. passbook savings deposits
D. checkable deposits
Answer: C
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Suppose the money supply grows at an annual rate of 10%, real GDP grows at 4%, the growth rate of velocity is 0%, and the expected real interest rate on Aaa corporate bonds averages 5.5%
Use the Fisher equation to determine the nominal interest rate on Aaa bonds. What will happen to the nominal interest rate in the long run if the growth rate of the money supply decreases to 7%?
Required reserves represent
A. Dollars that may be lent. B. A flaw in the banking system. C. A leakage from the flow of money. D. The desire on the part of some banks to hold funds and not lend them out.
Geometrically, marginal cost at any level of output may be interpreted as the slope of
A. the total cost curve at that level of output. B. the average variable cost curve at that level of output. C. a ray to the total cost curve at that level of output. D. the isoquant at that level of output.
Tariffs and quotas are effective in protecting industry
A. but at very high cost per job saved. B. and at very low cost per job saved. C. but have not saved any jobs in the industries. D. and do not distort the economy in the process.