What are the major components of M1? What are the major components of M2? Describe each component
What will be an ideal response?
The principal components of M1 are currency, transaction accounts, and traveler's checks. Currency includes coins and Federal Reserve notes (i.e., paper money). Transaction accounts are those against which checks may be drawn. Traveler's checks are a substitute for currency that can be replaced if lost or stolen. The principal components of M2 are M1, savings account deposits including money market deposit accounts (MMDAs), small time deposits, and money market mutual funds (MMMFs). Small time deposits are certificates of deposit (CDs) of less than $100,000 denomination. MMMFs invest their shareholders' funds in short-term securities, pay market-based interest rates, and allow holders to write a limited number of checks. MMDAs are like MMMFs, except they are offered by banks or thrift institutions such as savings and loan associations.
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A natural monopoly that is regulated to set price equal to marginal cost
A) makes an economic profit. B) makes zero economic profit. C) incurs an economic loss. D) could make an economic loss, an economic profit, or zero economic profit. E) makes zero normal profit.
Refer to Figure 4-3. What area represents producer surplus at the equilibrium price of P1?
A) D + E B) D + E + G + H C) A + B + C + D + E D) A + B + D