Sharon NgProfessor HendersonBUS05120 July 2011Lesson 14 HomeworkAmy Mendoza, a Minnesota native, has recently been elected to the U.S. House of Representatives. Amy, a long-time college professor, was elected on a platform of educational reform. Somehow, Amy finds herself appointed to the Joint Economic and Financial Services Committees. Amy is having a hard time understanding the testimony before each committee, but is hesitant to ask too many questions.1. On his first day, there is a discussion of M-1 and M-2. Amy doesn't have a clue what they are talking about. Explain M-1 and M-2.Answer: M-1 is the measure of the money supply that only includes the most liquid (spendable) forms of money. M-2 is a measure of the money supply that includes all the components of M-1 plus the forms of money that can be easily converted to spendable forms.2. Several days later, there is discussion of a bill raising insurance on bank deposits. Explain to Amy who insures bank deposits and the current limit.
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