1/M1 include? A/currency only. B/currency plus checkable deposits. C/currency in

Question

1/M1 include?
A/currency only.
B/currency plus checkable deposits.
C/currency in circulation plus checkable deposits.
D/currency in circulation plus checkable deposits plus traveler's checks.

2/The discount rate
A/is determined by markets forces of demand and supply in the market for bank reserves.
B/is set by the Board of Governors.
C/is determined by investment banks.
D/is determined by market forces of demand and supply in the credit market.

3/The function of money illustrated by the prevailing prices of goods and services is the
A/ medium of exchange function.
B/ unit of account function.
C/ standard of deferred payments function.
D/ store of value function.


4/Which of the following equations is correct?
A/assets = liabilities - net worth
B/assets = liabilities + net worth
C/liabilities = assets + net worth
D/net worth = liabilities + assets


5/ Decreasing the reserve requirement ratio is
A/ a contractionary policy because it lowers the amount of total reserves in the banking system.
B/a contractionary policy because it lowers the amount of excess reserves in the banking system.
C/ an expansionary policy because it raises the amount of excess reserves in the banking system.
D/an expansionary policy because it raises the amount of required reserves in the banking system.

Explanation / Answer

1.a 2.b 3.b 4.a 5.d this are the right ones

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