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busmanag_hw12_keagle - Tom Keagle 70-101 Ramirez...

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Tom Keagle 70-101 – Ramirez HOMEWORK #12 Chapter 15 – Review 1,2,5 Analysis 7,8 1. The four characteristics of money are portability, divisibility, durability, and stability. Portability is the ease of carrying around money and current money is light and easy to handle. Divisibility is the ease of splitting the money into smaller parts and current money is easily divisible into smaller parts with fixed values. Durability is the ability to stay usable for a long time and current money neither dies or spoils and can be replaced if worn out. Stability is the ability to stay of consistent value and current money, while the value fluctuates a bit, is considerably stable and predictable. 2. The components of M-1, the spendable money supply, are currency (paper money and coins), checks, and checking accounts (demand deposits). The components of M-2, spendable and convertible money supply, are the components of M-1 plus time deposits (such as CDs), money market mutual funds, and savings accounts.
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