PracticeQ_mid2

PracticeQ_mid2 - Elements of Economics 3 Midterm 2 MIDTERM...

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Elements of Economics 3 Midterm 2 MIDTERM 2 Practice questions (with thanks to your TAs) Please solve ALL of the following questions by choosing the alternative that provides the most accurate answer or best completes the statement. 1. Which of the following is not a component of M1? a. Currency d. Checking Account b. Savings Account e. All of the above c. Travelers’ Checks f. None of the above 2. Which of the following actions by the Federal Reserve will increase the money supply? a. The Fed sells bonds to the public. d. The Fed increases the discount rate. b. The Fed buys bonds from the public. e. a. and d. c. The Fed increases the reserve requirement. f. b. and c. 3. The velocity of the money supply can be formulated as a. Real GDP / Money Stock c. Price Level / Money Stock b. Nominal GDP / Money Stock d. Money Stock / Nominal GDP Use the following figure to answer questions 4 and 5. Components of the Money Supply Component Value (billions) Currency Savings Accounts Checking Accounts (no Interest) Checking Accounts (Interest bearing) Money Market Mutual Funds Travelers’ Checks 500 1250 350 250 550 50 4. What is the value of M2? a.
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PracticeQ_mid2 - Elements of Economics 3 Midterm 2 MIDTERM...

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