CourseCourseConceptConceptDocsDocuments

AP Macroeconomics Mea 3 C a Define Money and Its Functions B Calculate Using Data As Appropriate Measures of Money Questions

Identify the functions of money, classify assets within M1, M2, and the monetary base, and trace how account transactions change each measure.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • identify medium of exchange, unit of account, and store of value from transaction examples
  • explain how money reduces barter transaction costs and the double-coincidence problem
  • calculate M1 and M2 from currency, checking deposits, savings, time deposits, and other assets
  • distinguish currency in circulation and bank reserves in the monetary base
  • trace whether cash deposits, withdrawals, or account transfers change M1, M2, or only their composition

AP Macroeconomics Mea 3 C a Define Money and Its Functions B Calculate Using Data As Appropriate Measures of Money Questions question 1

[Maximum number: 1]

The following is a simplified balance sheet for Mi Tierra Bank in the United States.

Mi Tierra Bank

Mi Tierra Bank

Assume that Luis withdraws $5,000 in cash from his checking account at Mi Tierra Bank.

What is the initial effect of the withdrawal on the M1 measure of money supply? Explain.

All question bank results loaded