Q1. Which of the following items is least likely to be included in the M2 measure of the money supply? A) Money market mutual fund balances. B) Time deposits. C) Governmental checking account deposits.
Q2. Which of the following items is least likely to be included in the M1 measure of the money supply? A) Currency held at banks. B) Checking account deposits owned by businesses. C) Travelers’ checks.
Q3. Which of the following statements is most accurate with respect to the measures of the money supply? A) M2 includes M1 plus time deposits, savings deposits, and money market mutual fund balances. B) Checking account deposits owned by firms and government are included in M1, but those of individuals are not. C) When a firm writes a check to an individual, the M1 measure is increased.
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