Measuring the Money Supply: Explanation and Examples


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question 1 of 3

Which of the following measures of the money supply is largest?

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1. Which of the following is a component of M1?

2. Loretta deposits money into her savings account. If all other factors are held constant, how does this affect M2?

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About This Quiz & Worksheet

Use this quiz/worksheet combo to help you test your understanding of measuring the money supply. Components of M1 and M2 types of currencies and the term 'liquid' in relation to economics are topics tested on the quiz.

Quiz & Worksheet Goals

Work on this quiz/worksheet to measure your understanding of:

  • Measures of the money supply
  • Components of M1 and M2
  • 'Liquid', as it applies to economics
  • M1 and M2 liquidity

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related lesson on measuring the money supply
  • Interpreting information - verify that you can read information about M1 and M2 types of assets and interpret it correctly
  • Information recall - access the knowledge you've gained regarding liquidity
  • Knowledge application - use your knowledge to answer questions about the largest measure of the money supply

Additional Learning

Read the lesson called Measuring the Money Supply: Explanation and Examples to get more information on this topic. With this lesson, you can review these objectives:

  • Describe the meaning of 'the money supply'
  • List the money supply's three categories
  • Compare and contrast M1, M2, and M3