EBK EXPLORING ECONOMICS
7th Edition
ISBN: 9780100544772
Author: Sexton
Publisher: YUZU
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Question
Chapter 25, Problem 9P
To determine
To explain:
The changes in M1 and M2 due to the given situations.
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What is the difference between M1 and M2? Why aren’t M1 and M2 just combined?
Define M1 and M2. Which is bigger? I
why does m2 fall and not remain unchanged? doesn't M2 consist of both M1 and M2? so when M1 rise (due to more cash), savings account (which is under M2) will drop by the same amount as M1 rise, hence overall M2 will remain unchanged?
Chapter 25 Solutions
EBK EXPLORING ECONOMICS
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- Why (not how) did money evolve out of a barter economy?arrow_forwardThere are some possible explanation for m2>m1 . But, Phillip Cagan defended that m1>m2 situation might arise. Would you please explain what the factors may have role in this?arrow_forwardIf traveler’s checks were $500 higher and saving deposits were $1,000 higher, M1 would be?arrow_forward
- Calculate M2 if M1 is $3600 million and the Savings deposit with post office Savings bank is $5000 millionarrow_forwardExplain why you think the Federal Reserve Bank tracks M1 and M2.arrow_forwardIf you are out shopping for clothes and books, what is easiest and most convenient for you to spend: M1 or M2? Explain your answer.arrow_forward
- Calculate the value of M1 if M3 is $14000 million and the net time deposits with banks is $8000 millionarrow_forwardWhy can fiat money be successfully used as a currency despite the fact that it has no intrinsic value backing it up?arrow_forwardWhat will be the M2 if M1 is 630 and deposit with post office saving bank accounts is 480.arrow_forward
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