1) The M2 money supply is represented by
A) M2 = 1 + c + t + mm r + e + c× MB.
B) M2 = 1 + c + t + mm r + e + c× 1MB.
C) MB = 1 + c + t + mm r + e + c× M2.
D) MB = r + e + c1 + c + t + mm× 1M2.
2) The M2 money multiplier is
A) negatively related to high powered money.
B) positively related to the time deposit ratio.
C) positively related to the required reserve ratio.
D) positively related to the excess reserves ratio.
3) Everything else held constant, an increase in the currency ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply.
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease
4) Everything else held constant, a decrease in the currency ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier.
A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease