1. Which of the following is not included in M1?

a) money market mutual funds

b) traveler's checks

c) checkable deposits

2. If the reserve requirement ration is 25 percent, what is the money multiplier equal?

a) 25

b) 4

c) .04

3. Assume the reserve ratio is 25 percent and there are $40,000 in new deposits in the banking system. As a result, the money-creating potential of the commercial banking system: Hint: Calculate the Monetary Multiplier using reserve requirement ratio= 25%

a) is $40,000

b) is $200,000

c) is $120,000