M1 is composed of
A) currency held by individuals and businesses, traveler's checks, and checkable deposits owned by individuals and businesses.
B) checkable deposits owned by individuals and businesses, saving deposits, and certificates of deposit.
C) currency inside of banks, traveler's checks, and government-issued checks.
D) traveler's checks, credit cards, and e-cash.
E) currency held by individuals and businesses, traveler's checks, and the credit line on credit cards.
A
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An expansionary monetary policy in the United States should
A) decrease the foreign currency price of U.S. exports. B) cause the dollar to appreciate. C) decrease the dollar price of imports. D) decrease net exports.
The reason that velocity increases when interest rates rise is
A. the Fed encourages banks to turn money in faster for recycling, which causes money to move faster. B. the opportunity cost of saving increases, so people hold smaller cash balances. C. home mortgage payments increase, so people write larger checks that reduces their checking account balances. D. the opportunity cost of holding money increases, so average money balances decrease.