Question : 61) Which of the following included in the M1 definition : 1238077

 

61) Which of the following are included in the M1 definition of money?

A) currency and checkable deposits

B) currency and savings deposits

C) traveler’s checks and money market mutual funds

D) currency and small time deposits

E) traveler’s checks and savings deposits

62) M1 is defined as a measure of money including, in part,

A) checkable deposits and currency.

B) time deposits and currency.

C) currency and savings deposits.

D) time deposits and money market fund deposits.

E) the lines of credit on credit cards and currency.

63) Which of the following items is included in the M1 money supply?

A) $10 bills in the Bank of America

B) a $5,000 student loan granted to a U.S. citizen

C) coins in a Pepsi vending machine, waiting to be used as change

D) a $5,000 line of credit on a newly graduated student’s credit card

E) $1,500 in a student’s saving account

64) Which of the following is NOT a component of M1?

A) demand deposits

B) traveler’s checks

C) savings deposits

D) currency

E) Both answers C and D are correct.

65) If Rob deposits $300 in currency into his savings account at Bank of America,

A) M1 decreases.

B) M1 does not change.

C) M2 increases.

D) M2 decreases.

E) M1 and M2 both increase.

66) Suppose you use your debit card to buy soda from a soda machine. Which of the following is true regarding the transaction?

A) The debit card is not money; it’s only an instruction to make a loan.

B) The debit card is money; your use reflects the exchange of a good.

C) The debit card is not money; its use is only a tool to cause money to move from your account.

D) Your use makes the debit card money, as funds are transferred between your account and the machine owner.

E) Using the debit card is like using a check and is, therefore, money.

67) When Maria deposits $100 in currency in her checkable deposit at Bank of America, the immediate effect is that the quantity of M1

A) decreases.

B) does not change.

C) increases.

D) changes, but the direction of the change depends on whether the deposit was accepted by a thrift institution or a commercial bank.

E) changes only if Bank of America does not have excess reserves.

68) When Maria deposits $100 in currency in her checkable deposit at Bank of America, the immediate effect is that the quantity of M1 ________ because ________.

A) decreases; checkable deposits are included in M2 but are not included in M1

B) does not change; both currency and checkable deposits are included in M1

C) increases; both currency and checkable deposits are included in M1

D) changes, but the direction of the change cannot be determined; the direction of the change depends on what Bank of America does with the deposit

E) changes only if Bank of America has excess reserves; if the bank does not have excess reserves, the overall effect to M1 is too small to notice

69) When people make deposits of currency into a bank, the quantity of M1

A) immediately decreases by the amount of the deposit.

B) immediately increases by the amount of the deposit.

C) does not immediately change.

D) immediately changes but whether it increases or decreases depends on whether the bank had excess reserves or did not have excess reserves.

E) changes only if the deposit is an open market operation.

70) If you deposit $1,000 in cash in your checkable deposit at your bank, the quantity of M1 immediately

A) increases by $1,000.

B) decreases by $1,000.

C) increases by $2,000.

D) does not change in size.

E) changes, but more information about the required reserve ratio is necessary to determine the amount of the change.

 

 

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