ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
How does the private banking system create money (use M1 as the definition of money supply)? (Private banks are the ones like you, your family, and your friends do their banking at.)
Group of answer choices
A) The private banking system cannot create money.
B) Minting coins.
C) Lending a fraction of their deposits.
D) Printing and distributing paper money.
E) Buying government bonds.
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- Use the following table to determine the levels of M1 and M2 in the United States. Money Categories in the United States Asset Amount (billions of dollars) Currency $84 Demand deposits 81 Money market funds 45 Other checkable deposits 38 Savings deposits 466 Small time deposits 23 Traveler's checks 5 Instructions: Enter your answers as a whole number. a. Calculate the M1 money supply. $ billion b. Calculate the M2 money supply. $ billionarrow_forwardWhat is the role of the Federal Reserve in the United States? A) To provide legal advice to financial institutions B) To conduct monetary policy C) To insure bank deposits D) To offer consumer loans Don't use chatgpt or other ai tool. If you know correct answer then attempt if you gave wrong answer I will give 10 dislikes and more from my friends accountarrow_forwardWhat is money? What are the functions of money? What items may serve as money? Do you know of any other examples of money that is not currency or coins, in the US or other countries? Does money have to come from a government?arrow_forward
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