M1 is comprised of Question 10 options: currency held outside banks + checkable

Question

M1 is comprised of  

Question 10 options:

currency held outside banks + checkable deposits + gold

currency held outside banks + checkable deposits + traveler's checks

currency held outside banks + checkable deposits + savings deposits

currency held by banks but not the public + checkable deposits + traveler's checks

The interest rates will likely decrease whenever the Fed

Question 11 options:

increases the required reserve ratio.

increases the discount rate

sells government securities and bonds.

buys government securities and bonds

cuts taxes

If interest rates __________, investment spending tends to __________, and aggregate demand to __________.

Question 13 options:

rise; rise; rise

rise; fall; rise

fall; rise; fall

rise; fall; fall

currency held outside banks + checkable deposits + gold

currency held outside banks + checkable deposits + traveler's checks

currency held outside banks + checkable deposits + savings deposits

currency held by banks but not the public + checkable deposits + traveler's checks

The interest rates will likely decrease whenever the Fed

Question 11 options:

increases the required reserve ratio.

increases the discount rate

sells government securities and bonds.

buys government securities and bonds

cuts taxes

If interest rates __________, investment spending tends to __________, and aggregate demand to __________.

Question 13 options:

rise; rise; rise

rise; fall; rise

fall; rise; fall

rise; fall; fall

Explanation / Answer

1. D is Correct, Cash and Most Liquid form of cash.

2. D is Correct, Buying government bonds will increase the overall money supply and helps in reduction of interest rates.

3. D is Correct, Rise in interest rate will decrease the investment spending as the firms will have to pay more for using the money decline in investment spending will decrease the output and hence reduce the aggregate demand.

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