17 Which of the following is within the M2 but not within th

17) Which of the following is within the M2, but not within the narrow M1?

The paper currency is located outside the banks.

A) Savings accounts

B) Tourist checks.

The metal currency is located outside the banks

18) Money is ..

A) Anything that can be used as an intermediary for exchange.

B) Same as its income values.

C) The value of all coins and paper currency traded at some time.

D) All of the above.

19) Current account does not include any of the following?

A) Net transfers.

B) Country holdings of foreign assets.

C) Net investment income.

D) Net exports.

20) Increase the price level caused in

A) Move upward along the demand curve for money.

B) The demand curve shifted to the right.

C) shift the demand curve to the left.

D) Move down along the demand curve for money.

Solution

Ans:

17) Option A

Savings accounts

M1 includes cash, demand deposits, traveler\'s checks, and checking accounts.

M2 includes all elements of M1 as well as near money.Near money means savings deposits, money market securities, mutual funds and other time deposits.

18) Option A

Anything that can be used as an intermediary for exchange.

Money is primarily a medium of exchange . It is used as an intermediary for exchange for exchange of goods and services.

19) Option B

Country holdings of foreign assets.

Current account includes net exports,net income from abroad and net current transfers.

20) Option B

The demand curve shifted to the right.

when the demand curve shifts to the right, this will cause the price to increase.