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Which of the following is not included in M1? 0 a $5 bill in your wallet O $100 in your checking account O $500 in your savinIf a bank desires to hold no excess reserves, the reserve requirement is 8 percent, and it receives a new deposit of $500, OThe members of the Federal Reserves Board of Governors O are appointed by the president of the U.S. and confirmed by the U.SA bank loans Gregs Ice Cream $250,000 to remodel a building near campus to use as a new store. On their respective balance sThe agency responsible for regulating the money supply in the United States is o the Comptroller of the Currency. O the U.S.

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Answer #1

1) Solution: $500 in your saving account
Explanation: The saving account is included in M2
2) Solution: its required reserves increases by $40
Explanation: Increases in reserves = $500 * 8% = $40
3) Solution: are appointed by the president of the U.S. and confirmed by the U.S. Senate.
Explanation: In U.S. the president appoints Federal Reserve's Board of Governors and are confirmed by Senate
4) Solution: asset for the bank; and a liability for Greg's ice-cream. The loan increases the money supply
Explanation: A loan by bank to Greg will increase the money supply. It will be asset for bank and liability for Greg's ice-cream
5) Solution: the Federal Reserve
Explanation: In U.S. Federal Reserve has the responsibility for regulating the money supply

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