What is the general definition of monetary aggregates 1 Pape

What is the general definition of monetary aggregates? 1. Paper money in circulation plus treasury bonds. 2. Coins and paper money in circulation. 3. Paper money in circulation plus some bank deposits. 4. Currency in circulation plus some bank deposits. 5. Currency in circulation plus gold plus some bank deposits. 6. None of the above.

What is meant by “supply of money”? The amount of money the government supplies to the public during a certain period of time. The amount of money the lenders supply to borrowers during a certain period of time. The amount of money people lend to the government during a certain period of time. The amount of money people actually hold at a point in time. None of the above.

Which of the following is NOT a part of the M2 money supply?

Currency

Demand deposits

Travellers\' checks

Savings deposits

Large denomination time deposits (more than $100,000)

Small denomination time deposits (less than $100,000

What is the discount rate?

GDP deflator in 2014 = 150

It is the interest rate on a discount bond.

It is the interest rate banks charge their least risky borrowers.

It is the interest rate banks pay on demand deposits.

It is the interest rate the Fed charges on its loans to member banks.

None of the above.

Solution

(1) Option 4. Currency in circulation plus some bank deposits (which are demand deposits)

(2) Money supply is The amount of money people actually hold at a point in time.

(3) Large denomination time deposits (more than $100,000) is not included in M2. These are part of M3.

(4) Discount rate: It is the interest rate the Fed charges on its loans to member banks