a) Explain the difference between M1, M2 & M3 in terms of the definition of money supply.   (b) Discuss THREE (3) main determinants of money supply in Malaysia. Please give explanation in details with exampl

n the table below, the money supply, defined by M3, is equal to ........     Currency held by the non-bank public ($ billion) Current deposits at banks ($, billion) Other deposits at banks and other deposits held by other deposit -taking institutions ($, billion) 60 240 1500     Select one: a. 1200 billion b. 1800 billion c. 1500 billion d. 1740 billion

In December 2000, currency was $340 billion, travelers checks were $4 billion; checkable deposits owned by individuals and businesses were $450 billion, saving deposits were $1,900 billion, time deposits were $1,000 billion; and money market funds were $900 billion. What was the M1 in December 2000?

2. Discuss why fiat money can coexist with other assets that have higher rate of returns.

MONEY IN THE ECONOMY ($billions) Currency held by the public = $1,000 Demand Deposits = $3,000 Other Liquid Deposits = $12,000 Small Denomination Time Deposits = $500 Retail Money Market Funds = $1,500 Based on the information above, the money supply as measured by M1 is equal to: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a $1,000 billion. b $4,000 billion. C $16,000 billion. d $18,000 billion. X Your answer

9.     How would you incorporate security considerations/costs into the transactions demand model? What would this imply for the demand for currency in a relatively insecure urban environment (a) compared with a relatively safe one, (b) when owner-identified smart cards become available? Do these factors affect the demand for demand deposits? How would the proportion of currency to demand deposits be affected in these cases? 10.      Can the transactions demand model be used to explain why financial innovations in recent decades have reduced the transactions demand for M1? 11.      Are transactions demand models useless, as Sprenkle (1969) argued? If they are, how would you explain the demand for M1 or just for demand deposits in the economy?  

14. With reference to the Federal Reserve's M1 and M2 measures of the money supply, please indicate whether funds held in each of the forms listed below are included only in M1, only in M2, in both M1 and M2, or in neither M1 nor M2. (a) Money market mutual fund shares. (b) Bank reserves. ге (c) Demand deposits. (d) Small (under $100,000) certificates of deposit. (e) Currency in circulation.

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8. The money multiplier declined significantly during the period 1930–1933 and alsoduring the recent financial crisis of 2008–2010. Yet the M1 money supply decreasedby 25% in the Depression period but increased by more than 20% during the recentfinancial crisis. What explains the difference in outcomes?