e. medium of exchange 15. Money serves as a store of value when it a. rapidly ga
ID: 1173397 • Letter: E
Question
e. medium of exchange 15. Money serves as a store of value when it a. rapidly gains and loses value over time. b. loses a constant amount of value over time. c. can be used to purchase approximately the same amount of goods over t d. encourages a double coincidence of wants. e. is accepted by all merchants The value of money when the price level increases. a. increases b. decreases c. d. initially decreases but then increases e. does not change initially increases but then decreases Refer to the following table to answer the next questions: $12,500,000 $34,000,000 $1,000,000 $10,000,000 $7,000,000 $500,000 Checkable deposits Currency Traveler's checks Money market mutual funds Small time deposits Savings deposits 17. What is the value of M1? d. $57,500,000 e. $64,500,000 a. $13,500,000 b $46,500,000 c. $47,500,000 18. What is the value of M2? a. $13,500,000 b. $46,500,000 d. $57,500,000 e. $65,000,000 c. $47,500,000 19. Alfie has been given a loan for $10,000, and he deposited the full loan amoun checking account. How would this be reflected on his bank's balance sheet? . Loans would increase by $10,000, but deposits would decrease by less than$ Loans would be unaffected, but deposits would increase by $10,000 Loans and deposits would be unaffected. Loans would decrease and deposits would increase by the same amount ast Loans and deposits would increase by the same amount as the deposit.Explanation / Answer
15. Ans: can be used to purchase approximately the same amount of goods over time
Explanation:
One of the important function of Money is money serves as a store of value. Because money keeps its value over time, which people can save it for future exchanges.
16. Ans: decreases
Explanation:
Value of money = 1 / Price level
So, when price increase, Value of money will decrease.
17. Ans: $47,500,000
Explanation:
M1 = Checkable deposits + Currency + traveler's checks
= 12,500,000 + 34,000,000 + 1,000,000
= $47,500,000
18. Ans: $65,000,000
Explanation:
M2 = M1 + MMMF + Small time deposits + savings deposits
= 47,500,000 + 10,000,000 + 7,000,000 + 500,000
= $65,000,000
= 12,500,000 + 34,000,000 + 1,000,000
= $47,500,000
19. Ans: Loans and deposits would increase by the same amount as the deposit.
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