. Llalasj! I Normal 1 NoSpacing | Heading 1-1. Heading 2-1- I-Butti Title Subtit Unit 5 Test Corrections Part 1: Complete the Chart Below (Use the Money Supply power point in the message boards) M3 All of M1 and M2 M1 M2 Checkable DepositsAll of M1 Cash Coins Traveler's Checks 1. If you withdraw $1,500 from your savings account and purchase your textbooks for college, does this effect M1, M2 or M3? 2. If you cash your check and deposit $50 in checking and $100 in savings, does this effect M1, M2 or M37 Part 2: Fill in the use of each function of money 1. 2. 3. Money that serves as a medium of exchange is used for spending. Money that serves as a standard of value is used for Money that serves as a store of value is used for - Part 3: Loanable Funds 1. 2. 3. Does the amount of money in savings affect the supply or demand of loanable funds? When inflation increases, how does that affect nominal interest rates? When interest rates decrease, how does that affect the demand of loanable funds? Why? 4. When consumers have more disposable income, how does this affect demand of 5. When the government increases spending, how does this affect demand of loanable 6. If a business expects a low rate of return on investments, how does this affect the loanable funds? funds? demand of loanable funds? Words: 38 of 228