For the following list of items, indicate if they are in M1, M2, or neither: a. Your $5,000 line of credit on your Bank of America card b. $50 dollars’ worth of traveler’s checks you have not used yet c. $1 in quarters in your pocket d. $1200 in your checking account e. $2000 you have in a money market account

Q: Could each of the following items potentially serve as money? Consider each as a medium of exchange,…

A: As we answer only three subparts and the question has more than 3 subparts, we would be answering…

Q: Which type of money do we currently use in the United States ?

A: There are different types of money. The most relevant types are commodity money, fiat money,…

Q: Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both,…

A: The M1 and M2 are two different measures of the supply of money in the economy. The M1 is the narrow…

Q: Reserves consist of the currency in the___ plus the balance on its account at --- O market; reserve;…

A: Reserves = Money in the bank's vaults + reserves balance with the Fed. The reserves are the amount…

Q: Does the fact that your bank keeps only a fraction of your account balance in reserve make you…

A:

Q: How does the federal government regulates banking and our money supply

A: We are going to analyze relationship between federal government and banking to answer this question.

Q: How much can the bank immediately loan? Required Reserve Ratio=20% Assets Liabilities Total…

A:

Q: Consider the following data: savings deposits = $900 billion, currency (held outside banks) = $453…

A: Money supply is all the currency and other liquid instruments in a country's economy. The various…

Q: Given the following information, what are the values of M1 and M2? Small time deposits $650 billion…

A: M1, the most narrow definition of the money supply, includes coins and currency in circulation. It…

Q: If you deposit a $300 check in your checking account and the required reserve ratio is 10 percent,…

A: Given  Required Reserve Ratio = 10%  Deposits = $300

Q: Item Value (S billions) Currency Savings and money market deposit accounts Small-denomination time…

A: Money supply in the economy is measured using several instruments namely M1, M2, M3, and M4. M1 is…

Q: Which of the following is not counted in​ M2?   A. U.S. Savings account balances   B. U.S. Checking…

A: M2 = M1 + saving deposits with banks M1 = Coins and currency in circulation +checking account…

Q: Banks create money by O Making loans O Sending out credit cards to depositors O Increasing the…

A: Banks can create money by making loans as most of the banking systems in the world are fractional…

Q: What components of money do we count in M2?

A: Answer: Introduction: Money: Money is the stock of assets used for transactions. For instance,…

Q: banking system – possibly from another country. 1.1 Calculate the value of excess reserves, if any,…

A: In monetary economics, a money multiplier is one of various closely related ratios of commercial…

Q: Mira deposited $10,000 in a saving account at “B" bank on September 2018. On November 2018 she…

A: M1 = Checking account + Currency = 9000 + 1000 = 10000 M2 = M1 + Saving account = 10000 + 0 = 10000…

Q: 3. Use the figures in the table below to answer the following questions. Billions Small time…

A: The M1 money supply is the most limited definition of the money supply. It is the most liquid form…

Q: The money in your personal checking account is counted as:   A. Neither M1 nor M2 money…

A: M1 is the measure of money which includes -  M1 = Cash + Demand Deposits + Deposits in Checking…

Q: The information in the table pertains to an imaginary economy.   Type of Money Amount…

A: M2 is a component of money supply that included everything in M1 plus some other type of deposits…

Q: 1. For each case, determine the maximum quantity of money generated in the economy after all rounds…

A: Money multiplier = (1 / Reserve requirement)  Maximum increase in money supply = Money multiplier *…

Q: Why do banks practice fractional reserve banking

A: When a customer deposits a certain amount of money in a bank, the bank does not lend out the entire…

Q: Debit cards allow an individual to transfer funds directly in a checkable account to a merchant…

A: Money:Money refers to anything which is accepted by the people as a medium of exchange. It could be…

Q: A bank helps create money by loaning excess reserves   True False

A: Banks are the financial institutions that carry out their ways and the types by which they can…

Q: Which function of money is best served by bitcoin?   A. A medium of exchange   B. A unit…

A: The bid=t coin is accepted to exchange for certain goods and services. This indicates the medium of…

Q: 1. A bank has $140,000 in reserves, $1,600,000 in loans, and checkable deposits of $1,250,000. If…

A: A required reserve ratio is the fraction of deposits that regulators require a bank to hold in…

Q: Can the banking sector "create" money? Explain your answer.

A: Banks are defined as financial institutions that perform various financial functions for their…

Q: Does m2 , m1 or m3 include current deposit at bank ??

A: In macroeconomics, money is important as it is used to carry daily transactions and for making…

Q: c. total reserves. $ 3000 d. excess reserves. $ e. Calculate the cumulative change in the banking…

A: C. 3,00,000 pennies=$3,000 Total reserve= Deposit * reserve requirement Total reserve= 3,000 *5%…

Q: What is the Bangladesh bank money-laundering prevention act

A: Money laundering is viewed as an offence since it has conceivably wrecking financial, security, and…

Q: Why credit cards are not money? Explain any five points.

A: Money is any object which is acceptable legally as payment for services and goods and also for the…

Q: If currency ratio is 0.15, required reserves ratio is 0.10, excess reserves ratio is 0.05, banks…

A: A discount loan refers to a loan taken by a commercial bank from the central bank. Any change in…

Q: What are the four functions that money serves?

A: Money is an economic unit that is used to conduct daily transactions. Prior to the use of money, the…

Q: John deposits $1,600 into his checking account. If the reserve ratio is 5%, what are the required…

A: The required reserve is the minimum cash the bank can keep on hand. The excess reserve is any cash…

Q: Distinguish between legally required reserves and excess reserves.

A: Bank reserves are the minimum cash that financial institutions must have in hand to meet the…

Q: Answer the question below using the following information (all figures in billions of dollar) Given…

A: The money supply refers to all of a country's currency and other liquid assets on the measurement…

Q: what is the purpose and functions of inside money transfer?

A: In Democratic government system typically, it has been observed that there is both public and…

Q: How online banking affects money demand?

A: The equilibrium in the money market is attained at the point where the money supply intersects the…

Q: In Billions $600 $700 $500 Item Dollars Checkable Deposits Small Time Deposits Currency Money-Market…

A: Money supply M1 consists of the currency in circulation, checkable deposits (both current and saving…

Q: If the banking system has 5 million excess reserves and the required reserve ratio is 25% what is…

A: The value of the money multiplier is calculated on the basis of the percentage of the reserve…

Q: Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both,…

A: The commodity that is accepted as a medium of exchange in the market is known as money. It is used…

Q: How does the banking system create money? Explain

A: The important function which the banks performs is the creation of money in the economy. This…

Q: John deposits $1,800 into his checking account. If the reserve ratio is 10%, what are the required…

A: When an individual puts his deposit into hie bank account, his money is further used by bank as an…