Functions of money if an economy had only two goods both, Ask an Expert

Economics

1) (Functions of Money) What are the three important functions of money? Define each of them.

2) Functions of Money) "If an economy had only two goods (both nondurable), there would be no need for money because exchange would always be between those two goods." What important function of money does this statement disregard?

3) (Monetary Aggregates) Calculate M1 and M2 using the following information:

Large-denomination time deposits$ 304 billion

Currency and coin held by nonbanking public438 billion

Checkable deposits509 billion

Small-denomination time deposits 198billion

Traveler's checks 18 billion

Savings deposits 326 billion

Money market mutual fund accounts637 billion

4) (Monetary Control) Suppose the money supply is currently $500 billion and the Fed wishes to increase it by $100 billion.

a. Given a required reserve ratio of 0.25, what should it do?
b. If it decided to change the money supply by changing the required reserve ratio, what change should it make?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9474475

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