Question

13: M1 is:

A. the narrow definition of money, mainly including coins, bills and demand deposits.

B. the broader definition of money including currency, checking and savings accounts.

C. the narrow definition of money including only physical money – coins and bills

D. the broader definition of money including only banking money not physical money.

14: Money is any asset that performs which of the following functions?

A. Medium of exchange

B. Store of value

C. Measure of value

D. All of the above

15: If banks keep 12.5% reserves the deposit multiplier is:

A. 12.5

B. 8

C. 87.5

D. 125

16: An increase in the supply of money:

A. would cause both the interest rate and the quantity of money to rise.

B. would cause the interest rate to fall and the quantity of money to rise.

C. would cause both the interest rate and the quantity of money to fall.

D. would cause the interest rate to rise and the quantity of money to fall

Answer 1

13: M1 is: answer - A. the narrow definition of money, mainly including coins, bills and demand deposits.

14: Money is any asset that performs which of the following functions: answer- D. All of the above ( Medium of exchange, Store of value and Measure of value).

15: If banks keep 12.5% reserves the deposit multiplier is: answer - C. 87.5 %

16: an increase in the supply of money: answer- B. would cause the interest rate to fall and the quantity of money to rise.

  

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