1. What are the functions of money? (Refer to the lecture notes)

 

1. What is the double-coincidence of wants?

 

1. What are the items in M1?

 

 

1. If you take $50 out of your piggy bank and deposit it in your checking account, how did M1 change? How did M2 change?

 

 

1. What are the roles of banks?

 

 

1. How banks create money?

 

 

 

 

1. For the following list of items, indicate if they are M1, M2, or neither:

 

1. Your $4000 line of credit on your Bank of America card.
2. $50 worth of traveler's check you have not used yet.
3. $1 in quarters in your pocket.
4. $1200 in your checking account.
5. $2000 you have in money market account.

Answer rating: 100% (QA)

1 Functions of Money a Medium of exchange b Unit of account c Store of value d Standard of deferred ... View the full answer