3. Checkable deposits are: a. Time Deposits b. Part of the M 1 money supply c. P

Question

3. Checkable deposits are: a. Time Deposits b. Part of the M 1 money supply c. Part of the M 2 money supply d. Credit Card purchases e. Both b and c f. All of the above 4. Cash leakage has the following effect: a. More checkable deposits b. Lower velocity of money c. A constant real GDP d. A rise in the reserve ratio e. A rise in the multiplier effect f. Less currency in circulation 5. During an inflationary period, the Federal Reserve would probably: a. Raise the discount rate b. Sell government securities c. Lower the reserve requirements d. Print more Federal Reserve Notes e. Both a and b f. Both b and c

Explanation / Answer

Ans:

3) Option B

Part of the M1 money supply

M1 money supply includes very liquid money such as cash, checkable deposits,demand deposits and and traveler's checks.Hence checkable deposits are part of the M1 money supply.

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