L. Rey terms and concepts for chapter 11 Aa Select the term that best matches th

Question

L. Rey terms and concepts for chapter 11 Aa Select the term that best matches the definition provided. Funds that cannot be used for payment directly Demand deposits Savings deposits Defining the dollar as equivalent in value to a certain amount of gold, thereby allowing direct convertiblity from currency to gold Currency outside chartered banks plus demand and savings deposits at chartered banks Measures the potential amount of demand deposit money that the banking system generates with each dollar of reserves

Explanation / Answer

Ans)

Savings Deposits
These cannot be used for payment directly and earn a higher interest than the demand deposits.

Gold Standard
It enables the dollar to be directly be convertible to gold

M2
M2 is M1 plus savings deposits

Money multiplier
Money multiplier (m)=1/required reserve ratio

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