How are bananas used as a form of money in Bananatown? A. Bananas function as a unit of account and medium of exchange, but not as a store of value. B. Bananas function as a medium of exchange and store of value, but not as a unit of account. C. It is impossible to use bananas as currency in Bananatown. D. Bananas function as a unit of account and store of value, but not as a medium of exchange.

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Using the information below compute the M2 money supply. The M2 money supply is $ Using the information below compute the M2 money supply. Category Currency and coin held by the public Checking account balances Traveler's checks Savings account balances Small denomination time deposits Money market deposit accounts in banks Noninstitutional money market fund shares The M2 money supply is $ Amount $200 $1,900 $10 $3,400 $5,000 $1,000 $2,000

Money/Banking/The Quantity of Money Theory (Chapter 14) 1.1 What are the four functions of money? Explain each in your own words. Can something be considered money if it does not fulfill all four functions? 1.2 Using the five criteria in the textbook, explain how U.S. currency is suitable to use as a medium of exchange. 1.3 Suppose that you decide that you no longer want to hold currency, and deposit all of your currency holdings to your checking account. What is the immediate or initial impact of this transaction on M1 and M2?

Celine, another manager at a different branch of MillerBank in a different region of the country, faces a reserve requirement of 10%. She has excess reserves 0f $1000. What’s the maximum amount that she could increase the money supply?   a.500 dollars b.1000 dollars c.10000 dollars d.100 dollars e.2000 dollars

part-c: Suppose I live in a hypothetical country, Pandesia, where there is 100% reserve banking. I deposit $1,000 in a checking account at the 1st National Bank of Pandesia. Using the T-account (ie: assets on the left and liabilities on the right), explain whether / how my deposit changes the money supply in Pandesia. DON'T ANSWER PART C Just use part c to answer D  part-d: Now suppose the Central Bank of Pandesia (CBP) decides that after centuries of 100% reserve banking, it is time for a change and decide to switch the Pandesian banking system to fractional reserve banking. To begin with, board of governors at the CBP agree on a required reserve ratio of 10%. How does my deposit of $1,000 at the 1st National Bank of Pandesia impact the money supply in Pandesia after this change? Explain by using the T-account.   part-e: Next suppose that Pandesian economy enters a recession. To fight against the unemployment created by the recession, CBP decides to expand the Pandesian money supply.…

Consider the three functions of money discussed in class: medium of exchange, unit of account, and store of value. Choose one function and describe what it means. What would economic transactions be like without this function? Would life be better or worse?

If raw whole eggs of uniform size  were used as money, which of the following functions of money would be the hardest for this to satisfy? Select one: a. store of value b. unit of account c. medium of exchange d. certificate of gold

Problems and aplicarion q7

suppose the required reserve ratio is 11%. How much additional money can BBB lend out at a maximum? suppose the required reserve ratio is lowered to 8%. What is the Maximum amount of additional money that BBB can lend out? Is this different than the maximum amount of new money BBB can create by itself?             3. suppose the required reserve ratio is raised to 15%.  What is the maximum amount of additional money BBB can lend out?