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increase in checkable deposits.
158. Which of the following would be considered to be the most liquid?
159. Which of the following items are included in money supply M2 but not M1?
160. As of February 2016, M1 accounted for roughly what percentage of M2?
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written consent of McGraw-Hill Education.
C. 50 percent
D. 75 percent
161. Checkable deposits are included in
162.
Item
Billions of Dollars
Checkable Deposits
$597
Small TIme Deposits
818
Currency
639
Money-Market Mutual Funds Held By Businesses
1,045
Savings Deposits, Including Money-Market Deposit Accounts
2,866
Money-Market Mutual Funds Held By Individuals
979
Refer to the accompanying table. The size of the M1 money supply is
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written consent of McGraw-Hill Education.
D. $1,618 billion.
163.
Item
Billions of Dollars
Checkable Deposits
$597
Small TIme Deposits
818
Currency
639
Money-Market Mutual Funds Held By Businesses
1,045
Savings Deposits, Including Money-Market Deposit Accounts
2,866
Money-Market Mutual Funds Held By Individuals
979
Refer to the accompanying table. The size of the M2 money supply is
164.
Item
Billions of Dollars
Checkable Deposits
$597
Small TIme Deposits
818
Currency
639
Money-Market Mutual Funds Held By Businesses
1,045
Savings Deposits, Including Money-Market Deposit Accounts
2,866
Money-Market Mutual Funds Held By Individuals
979
Refer to the accompanying table. The value of the money included in M2 but not counted in M1
is
165. Items
1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits
Refer to the accompanying list. The M1 money supply is composed of items
34-65
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 34-02 List and describe the components of the U.S. money supply.
Test Bank: II
Topic: The Components of the Money Supply
166. Items
1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits
Refer to the accompanying list. The M2 money supply is composed of items
167. Items
1. Money market mutual funds held by individuals
2. Savings deposits, including money market deposit accounts
3. Money market mutual funds held by businesses
4. Currency held by the public
5. Small time deposits
6. Checkable deposits
Refer to the accompanying list. Which items are included in the M2 money supply but not the
M1 money supply?
168.
Item
Billions of Dollars
Checkable Deposits
$2,000
Small TIme Deposits
350
Currency Held By The Public
80
Savings Deposits, Including Money-Market Deposit Accounts
1,300
Money-Market Mutual Funds Held By Individuals
600
Money-Market Mutual Funds Held By Businesses
700
The accompanying table contains hypothetical data for an economy. The size of the M1 money
supply is
169.
Item
Billions of Dollars
Checkable Deposits
$2,000
Small TIme Deposits
350
Currency Held By The Public
80
Savings Deposits, Including Money-Market Deposit Accounts
1,300
Money-Market Mutual Funds Held By Individuals
600
Money-Market Mutual Funds Held By Businesses
700
The accompanying table contains hypothetical data for an economy. The size of the M2 money
supply is
170. The so-called near monies have the following characteristics, except
34-68
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 34-02 List and describe the components of the U.S. money supply.
Test Bank: II
Topic: The Components of the Money Supply
171. People can generally get the following items at their commercial banks, except
172. Michelle transfers $4,000 from her savings account to her checking account. What effect is
this change likely to have on M1 and M2?
173. One reason that near monies are important is because
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written consent of McGraw-Hill Education.
and investment in the economy.
D. credit cards synchronize one's expenditures and income, thereby reducing the cash and
checkable deposits one must hold.
174. The use of a credit card is most similar to
175. The use of a debit card is most similar to
176. One major advantage of credit cards used for transactions is that they
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written consent of McGraw-Hill Education.
A. offer discounts on most transactions.
B. charge a lower interest rate than other means of payment.
C. give consumers the lowest prices on products purchased.
D. allow consumers to coordinate timing and payment for purchases.
178. Which of the following "backs" the value of money in the United States?
179. United States currency has value primarily because it
180. The Federal backing for money in the United States comes from
181. What "backs" the money supply of the United States?
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182. Money in the U.S. is essentially debt of
183. The basic requirement for an item to function as money is that it be
184. Checkable deposits are money because they are
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written consent of McGraw-Hill Education.
A. legal tender.
B. fiat money.
C. acceptable as payment.
D. token money.
185. When paper money is designated as legal tender, it means that
186. When there is inflation in the economy, it implies that the
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written consent of McGraw-Hill Education.
Topic: What Backs the Money Supply?
187. If the price index rises from 100 to 130, then the purchasing power of the dollar will fall
by about
188. If the purchasing power of the dollar is falling, then it follows that
189. The purchasing power of the dollar would fall by 20 percent if the price index rises by
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Difficulty: 02 Medium
Learning Objective: 34-03 Describe what backs the money supply, making us willing to
accept it as payment.
Test Bank: II
Topic: What Backs the Money Supply?
190. An inflation rate of 8 percent would erode the purchasing power of the dollar by
191. To keep high inflation from eroding the value of money, monetary authorities in the United
States
192. The Federal Reserve Banks are owned by the
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written consent of McGraw-Hill Education.
C. United States Treasury.
D. member banks.
193. The Federal Reserve System consists of which of the following?
194. How many members can serve on the Board of Governors of the Federal Reserve System?
195. The Federal Reserve System was established by the Federal Reserve Act of
196. The Federal Reserve System of the United States is the country's
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to banks and thrifts.
Test Bank: II
Topic: The Federal Reserve and the Banking System
198. Members of the Federal Reserve Board of Governors are
199. Which group aids the Board of Governors of the Federal Reserve System in conducting
monetary policy?
200. The Federal Open Market Committee (FOMC).
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written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Understand
Difficulty: 02 Medium
Learning Objective: 34-04 Discuss the makeup of the Federal Reserve and its relationship
to banks and thrifts.
Test Bank: II
Topic: The Federal Reserve and the Banking System
201. The Federal Open Market Committee (FOMC) of the Federal Reserve System is primarily
for
202. The 12 Federal Reserve Banks can best be characterized as
203. The most important among the Federal Reserve district banks in conducting monetary
policy is the
204. The Federal Reserve System is divided into
205. Holding the money deposits of businesses and households and making loans to the public
are the basic functions of
