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Question

1.Velocity is

 another term for the money multiplier.

 equivalent to real GDP.

 equivalent to

the price level.

 equivalent to nominal GDP.

 the number of times the average dollar is spent in a year.


2.Which of the following is not part of M1?

 Checkable deposits

 Savings deposits

 Currency

 Traveler's checks

 Coins


3.Which of the following are considered among the chief functions of money?

  1. Serves as a medium of exchange
  2. Serves as a store of value
  3. Is highly liquid

 I only.

 II only.

 III only.

 I and II only.

 I, II, and III.


Which of the following is not counted in M2?

 Checkable deposits

 Savings deposits

 Currency and coins

 Traveler's checks

 Vault cash


If you need $200 to buy a new iPhone™ next year and interest rates are 2%, the amount of money you need to deposit into the bank this year is

 $40.00.

 $40.08.

 $100.00.

 $166.67.

 $196.08.


If you save $1,200 at 6% this year, next year your money will be worth

 $1,272.

 $1,290.

 $1,722.

 $1,920.

 $7,200.


Crowding out occurs when

 the government is using contractionary fiscal policy.

 the government is using expansionary fiscal policy.

 Congress increases personal income taxes.

 Congress increases business taxes.

 Congress increases spending and personal income taxes by the same amount.

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