Level of currency held by the public

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Reference no: EM13763845

1. If the required reserve is 0.2, the level of deposits is $1,000, the level of currency held by the public is $100, the level of excess reserves is $100, the level of MMF is $1,000 and the level of time deposits is $2,000, then M2 is:

A) 20.5 B) 8.5 C) 3.5 D) 11

2. Ceteris paribus, when __ increases, the ratio M2 increases.

A) RR B) C/D C) ER/D D) MMF/D

3. Ceteris paribus, an increase in the ratio T/D will cause M1 to:

A) stay the same

B) increase by larger proportion

C) decrease

D) increase by a smaller proportion

Reference no: EM13763845

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