Part 2 - Practice- For each of the following examples, identify if it is considered M1 money supply, M2 money supply, or not counted (NC) in the U.S. money supply.   1. A $20 bill given to you by your grandma 2. You have $400,00 equity in real estate 3. A $100 deposit in your savings account 4. A $20 gift card 5. $100 in your checking account 6. $10 trillin dollars of Zimbabwe currency 7. $50,000 in Amazon stock 8. $1,000 in a money market account 9. $1 Trillion in the U.S. Treasury 10. A $300 certificate of deposit 11. Bitcoin worth $10,000 12. $20 bill in your pocket

Q: Consider the following information on money supply in South Africa: rr = required reserve…

A: Money supply depends on the reserve ratio. The rise in reserve ratio leads to fall in the money…

Q: M2 definition of the Money Supply includes which which of the following?   Question 30 options:…

A: Functions of money . A store of value . a unit of account . a medium of exchange

Q: Question 2 on Topic 5  Most people in the country of Classica tend to keep $3 out of every $100 of…

A: The reserve requirement ratio (RR) is 4% and the wallet reserve or individual preference to hold by…

Q: Hi please

A: Cashless society:- A cashless economy is an economical situation in which economic transactions are…

Q: The information in the following table pertains to the hypothetical economy of Lalaland. Amount Type…

A: We have to find M1 and M2 money supply from the given table.

Q: 4. Money stock Identify whether each of the following examples belongs in M1 or M2. If an example…

A:

Q: Scenario: Assets and Liabilities of the Banking System Scenario: Assets and Liabilities of the…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: Use the following table to determine the levels of M1 and M2 in the United States.   Money…

A: M1 and M2 are money supply which are also part of narrow money.  M1 includes currency, demand…

Q: question has three parts below) In Gainesville, people hold $1,000 of currency and $4,000 of demand…

A: 1. Given:Currency=$1000Demand deposits=$4000Reserve-deposit ratio= 0.25   Money…

Q: Table 2 Bank of Duluth Assets Liabilities Deposits Reserves $240,000 $19,200 220,800 Loans Refer to…

A: Given  Reserves =$19200 Deposit = $240,000   We have to calculate the change in money supply when…

Q: part-a: What are the components of the M1 money supply? What are the components of the M2 money…

A: M1 money supply includes 2 things:  - Currency : the currency notes in the hands of the public  -…

Q: The table below is the balance sheet for all the banks combined in the banking system. Assets…

A: Answer: (a). Demand deposits worth $125,000 are included in the money supply. Explanation: A demand…

Q: Use the table to answer the questions: Country A $100 10% Country B $2000 Initial Demand Deposits…

A: Money supply is the stock of money in economy. it includes cash as well as non cash assets.…

Q: Real-Time Data Analysis Exercise* Two Measures of Money: November 2020 andNovember 2021 *Real-time…

A: Answer: Given, M1 in November 2020 = $17,589.0 billion    (Note: if all the components of M1 in 2020…

Q: 29. Refer to Table 1. What is the M2 money supply? A) $426 billion. B) $325 billion. C) $351…

A: M1 = cash or coins held by public + demand or checkable deposits + traveller checks = 75 + 14 + 11 +…

Q: A bank has $500 million in checkable deposits, $600 million in savings deposits, $400 million in…

A: Given, Checkable deposits = $500 million Saving deposits = $600 million Small time deposits = $400…

Q: What is the largest component of M1 money supply?   a.Travelers checks b.Demand deposits c.Coin…

A: Money supply refers to all the currency and other liquid monetary instruments in a country’s economy…

Q: Total deposit collected by the banking system increases from 200 trillion to 260 trillion. Required…

A: Initial deposits = $200 trillion New total deposits = $260 trillion Required reserve = $20 trillion…

Q: 7. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third…

A: Commercial banks accept deposits from the public and offer a rate of interest for deposits to the…

Q: Read the following extract and answer the question that follows.  Yes, SANParks can refuse to take…

A: *Answer:

Q: A banking system has deposits of $ 1000 , loans of $ 800 , and reserves of $ 200 . The central bank…

A: Banks are the financial intermediaries who accept deposits from the people. Banks are also providing…

Q: The information in the table pertains to an imaginary economy.   Type of Money Amount…

A: M2 is a component of money supply that included everything in M1 plus some other type of deposits…

Q: Use the information in the table below to answer the following two questions. Items Billions of $…

A: Answers   1. M1 = M2 --savings deposit - money market fund - small time deposit = 13700 - 700 -…

Q: Question 1 Assume that the following asset values (in millions of dollars) exist in Ironmania:…

A: Federal Reserve Notes in circulation = $700;Money market mutual funds (MMMFs) held by individuals =…

Q: People in Cambodia keep talking about Bitcoin, a crypto currency (electronic currency). Given the…

A: Solution: (1)  Cryptocurrency: It refers to a digital currency that is secured by cryptography,…

Q: 5. The money creation process Suppose First Main Street Bank, Second Republic Bank, and Third…

A: * SOLUTION :-    From the given information the calculation is given as ,

Q: Item Billions of Dollars Money market mutual $50 funds Currency in the hands of the public 650 Small…

A: There are different forms of money due to which those are classified as M1, M2, M3, and so on based…

Q: 2. Required and excess reserves Suppose that Best National Bank currently has $100,000 in checkable…

A: Reserve requirements are the funds held in reserve by a bank to guarantee that it can satisfy its…

Q: Money Market Mutual Fund Balances Held by Businesses $100 Money Market Mutual Fund Balances Held by…

A: In macroeconomics, money is important as it is used to carry daily transactions and for making…

Q: Problem 2: Fractional Reserve Banking Suppose your little cousin decides to take $500 out of her…

A: The banks are able to create new money in the economy through the system of banking called…

Q: If deposits in the banking system are $540, while the reserve ratio is 0.2 and the currency to…

A: Total demand for high powered money can be calculated by using the following formula.

Q: Scenario M1 M2 Monetary base 19. Marc transfers $500 from his savings to his checking…

A: Monetary base, M1 and M2 are the standard measures of money supply. Monetary base is the sum of…

Q: 1.13 Read the following extract and answer the question that follows. Yes, SANParks can refuse to…

A: M1 is the basis and narrow measure of money supply which includes currency in circulation and demand…

Q: Briefly the three tools to control money supply. Which of these tools does Bangladesh Bank uses most…

A: Tools to control money supply are part of monetary policy of central  bank of any country, these…

Q: In December 2000, currency was $340 billion, travelers checks were $4 billion; checkable deposits…

A: In macroeconomics, money is important as it is used to carry daily transactions and for making…

Q: Do federal gold reserves count as M1 money?

A: M1 represents the money supply in the economy by the Central Bank. It represents the coins and bills…

Q: 3. Table below shows the money supply of a country in the year 2019; Items RM(Million) 10 890…

A: a. M1 = 14660 + 36790 + 24650       = 76,100 M2 = 51450 + 22,920 + 24650 + 12460        =  1,11,480…

Q: We have the following monetary and financial data about a country. (This country uses the same…

A: Money supply refers to the total quantity of money available in an economy at a particular time. The…

Q: multiple answer. This question asks you to work through an open-market purchase of $4,000 in…

A: Given the open market operations of bank 1 is 4000$ Percentage of deposits in reserves = 60%

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.