Economists are searching for a “good” measurement of the money supply. What constitutes a good measurement...

Question

Question

Economists are searching for a “good” measurement of the money supply. What constitutes a good measurement of the money supply?

business economics

Answer 1

Answer #1

Money supply is total amount of money at any given time in economy.

Economist measure money supply because it is directly connected to activity which take place all around our economy.

The three good measurement of money supply is m1, m2 and m3

M1 include all currancy, travel's check, demand deposit and checkable deposit.

M2 include m1 plus short term time deposit and 24 hour money market fund.

M3 include m2 plus Long terms time deposit and money market fund more than 24 hour maturity.

Answer 2

Similar Homework Help Questions

What do economists mean when they state that a good is scarce? a. The amount of...

What do economists mean when they state that a good is scarce? a. The amount of the good that people would like exceeds the supply freely available from nature. b. People will want to buy more of the good regardless of the price of the good. c. It is impossible to expand the availability of the good beyond the current amount. d. There is a shortage or insufficient supply of the good at the existing price.
Economists agree that increases in the money supply growth rate increases inflation and that inflation is...

Economists agree that increases in the money supply growth rate increases inflation and that inflation is undesirable. So why have there been hyperinflations and how have they been ended?
What constitutes ‘good’ communication? How does good communication contribute to effective medication management?

What constitutes ‘good’ communication? How does good communication contribute to effective medication management?

1. Using separate graphs, demonstrate what happens to the money supply, money demand, the value of...

1. Using separate graphs, demonstrate what happens to the money supply, money demand, the value of money, and the price level if: a. the Bank of Canada increases the money supply. (6 marks) b. people decide to demand less money at each value of money. (6 marks) 2. Economists agree that increases in the money supply growth rate increases inflation and that inflation is undesirable. So why have there been hyperinflations and how have they been ended? (5 marks)
what are your current assumptions about writing and what constitutes good and bad writing.

what are your current assumptions about writing and what constitutes good and bad writing.
Which measurement of money supply are checkable deposits included in? - only M1 BUT NOT M2...

Which measurement of money supply are checkable deposits included in? - only M1 BUT NOT M2 -ONLY m2 but not m1 -neither m1 nor m2 - both m1 and m2

Which measurement of money supply are credit cards included in - only m1 but not m2...

Which measurement of money supply are credit cards included in - only m1 but not m2 -only m2 but not m1 -neither m1 nor m2 -both m1 and m2
MIPS, what are the financial implications based on an organization's score? What constitutes a 'good' score?...

MIPS, what are the financial implications based on an organization's score? What constitutes a 'good' score? Is the use of a registry required?
1. What is a measurement? Give your own definition of what constitutes a measurement based on...

1. What is a measurement? Give your own definition of what constitutes a measurement based on your previous courses with lab components (biology, chemistry, physics) 2. Two engineers must measure the distance between the McGill metro station to the athletic centre to build an underground tunnel. One engineer finds that the distance is 9134 ± 5m while the other finds that the distance is 9150 ± 20m. In what ways can they compare their measurements? Do their measurements agree? Explain....

Which measurement of money supply are credit cards included in? Only M1 but not M2 Only...

Which measurement of money supply are credit cards included in? Only M1 but not M2 Only M2 but not M1 Neither M1 nor M2 Both M1 and M2