Blank #1: provide high returns, discourage excessive ATM use, or reduce risk Bla

Question

Blank #1: provide high returns, discourage excessive ATM use, or reduce risk

Blank #2: diversification, charging high fees, compound interest

Blank #1: increases or decreases

Blank #2: checkable deposits, reserves, loans, building and furniture, or net worth

1. Money aggregates Identify whether each of the following belongs in M1 or M2. If it belongs in both, be sure to check both boxes. Example Albert has $1,200 in a checking account. Jason has $20,000 in a money market account. Hilary has $6,000 in a two-year certificate of deposit (CD) Madeline has a jar of coins by her bedside table. M1 M2 True or False: Any type of money that falls into the M2 category is, by definition, a part of M1 as well True False

Explanation / Answer

1.

Correct Answer:

Albert has $1200 in checking account.                                                     It belongs to M1 and M2 both

Jason has $20000 in money market account.                                         It belongs to M2.

Hilary has $6000 in 2 year certificate of deposits.                                 It belongs to M2.

Madeline has a jar of coin by her bedside table.                               It belongs to M1 and M2 both.

Explanation:

Currencies, coins, demand deposits and checking accounts form the part of M1. M2 includes Ma as well as near money such as MMMF and time deposits such as COD and other form of fixed deposits. Thus, whatever comes under M1 belong to M2 also. But, it does not happen vice versa.

Correct Answer:

False

Explanation:

Whatever money comes under M1 belong to M2 also. But, it does not happen vice versa. Thus, given statement is false.

Pl. repost other unanswered questions for their proper answers!

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