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Maslowich
3 years ago
14

In the narrowest definition of money, M1, savings accounts are excluded because they are a interest paying accounts. b not a med

ium of exchange. c a store of purchasing power. d not insured by federal deposit insurance. e available from financial institutions other than banks.
Business
1 answer:
Verdich [7]3 years ago
7 0

Answer:

b. not a medium of exchange

Explanation:

M1 represents money supply comprising of those instruments of monetary value, which are highly liquid and readily convertible to cash. So M1 includes cash in hand in the form of currency and coins, demand deposits, travelers checks and others payable on demand.

Those securities and short term investments which cannot be readily converted to cash or which require some time period are excluded from the definition of M1.

Thus, M1 excludes financial assets like bonds and savings account. M1 is regarded to be the narrowest definition of money as it takes into account only the money which is getting circulated in a country.

It takes into consideration only the money that can be used as basic medium of exchange and under it, savings account cannot be considered as a medium to exchange and is classified under M2.

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If real GDP grows by 3 percent, the velocity of circulation does not change, and the quantity of money grows by 3 percent, then
trapecia [35]

Based on the real GDP growth rate, the velocity of circulation, and the quantity of money, the long run inflation rate will be 0%.

<h3>What is the long-run inflation rate?</h3>

This can be found using the Quantity theory of money:
Money supply x Velocity of circulation = Price level x Real GDP

Can also be written as:

% change in M + % change in V = % change in P + % change in Y

Solving gives:

3% + 0 = P + 3%

P = 3% - 3%

= 0%

The price level is to increase by 0% which means that inflation is 0%.

Find out more on the Quantity theory of money at brainly.com/question/26370040.

7 0
2 years ago
WILL GIVE BRAINLIEST!!
alina1380 [7]
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4 0
3 years ago
An example of a transfer payment is:________
Fed [463]

Unemplyment benefits are an example of a transfer payment. So, the correct option of this question is b.

Transfer payment is payment made or income received in which goods and services are not paid is known as transfer of payment. It is one-way payment. Transfer Payment is also known as Government transfer as it is given by the Government without goods and services being received in return. Transfer of payment is based on the concept of donor and recipient. A donor gives up something of value without receiving anything in return.

Unemployment benefits are given by the Government without receiving any goods or services in return so it is considered a transfer payment. The government collects money through taxes then this money is reallocated to citizens equally through welfare services.

Unemployment benefits are also provided by the Government therefore it is an example of transfer payment.

While other options are incorrect because rent, wages and government purchases dont have relation with transfer payment.

Therefore, the correct option of the given question is b i.e. Unemployment benefits.

You can learn more about transfer payment at

brainly.com/question/7176766

#SPJ4

6 0
2 years ago
Which type of budget indicates more expenses than income?
Fittoniya [83]

Answer:

a deficit budget

Explanation:

A budget is a plan detailing how an individual, a firm, or a government will spend its anticipated revenue. In short, a budget is a plan of expenditure. Budgets are usually prepared at the beginning of a period to guide the use of available resources.

An ideal situation is when the planned expenditure equal to the expected income. Such a plan is called a balanced budget. However, in some circumstances, the planned expenditure exceeds the projected income. That budget is a deficit budget.

3 0
3 years ago
Rank the five following levels of post secondary education based on the average yearly income .
mr Goodwill [35]
What’s your question? I don’t see the options...
7 0
2 years ago
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