MI plus savings account balances plus small-denomination time deposits plus noni
ID: 1105057 • Letter: M
Question
MI plus savings account balances plus small-denomination time deposits plus noninstitutional money market fund shares. D) savings account balances plus small-denomination time deposits plus traveler's checks. Question 10 (1 point) If a person withdraws $100 from his/her checking account and puts it in his/her savings account, then M 2 will and A) increase; decrease B) not change; not change O C) increase; not change D) not change; decrease O E) not change; increase Save Question 11 (1 point) The required reserve ratio of a bank equal its required reserves O A) divided by its deposits. C) divided by its liabilities. Save Question 12(1 point)Explanation / Answer
Answer.)
Q10.) D.) Not Change, Decrease
M2 also includes M1. So Withdrawing from checking account will decrease M1 but there will be no change in M2 as same money is transferred to the different head of M2.
Q11.) A.) Divided by its Deposits
Remember that The required reserves of a bank equal its Deposits multiplied by the required reserve ratio.
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