--%>

Components of the M1 money supply

Describe the components of the M1 money supply? State the largest component of the M1 money supply? State legal tender components of M1? Give the reason of greater face value of a coin than its intrinsic value? Distinguish among M2 and M2+ and M2++.

E

Expert

Verified

M1 is currency (in the circulation) plus chequable (demand) deposits. The biggest component of M1 is chequable deposits. If a coin face value were not greater than its intrinsic (metallic) value, people would eliminate coins from circulation and sell them for their metallic content. M2 = M1 + personal savings deposits & non-personal (business) notice deposits at chartered banks. M2+ = M2  +  mortgage loan companies and deposits at trust, caisses populaires and credit unions, and government savings institutions +  money market mutual funds, and life insurance annuities. M2++ = M2+ + Canada Savings Bonds & other retail instruments + non-money market funds.

 

   Related Questions in Finance Basics

  • Q : Can a corporation contain too much

    Can a corporation contain too much working capital? Describe. A firm can contain too much working capital if this is losing the chance to invest in high returning fixed assets and if this goes beyond the amount of working capital required for r

  • Q : Sizes of the MPC and MPS Normal 0 false

    Normal 0 false false

  • Q : Define Executive Order Executive Order

    Executive Order (EO): It is a budget document, issued by the Department of Finance, asking for the State Controller’s Office to make an adjustment in their accounts. The adjustments are usually authorized by the Budget Act provision language, Bu

  • Q : Describe who owns a credit union

    Describe who owns a credit union? Credit unions are owned through their members. While credit union members put money in their credit union, they are not "depositing" the money technically.  In spite of, they are purchasing shares of the cr

  • Q : All rates are stated annually with

    1.      Assume the following (all rates are stated annually with semiannual compounding):

  • Q : Security in banking operations Security

    Security in banking operations is a major problem in financial institutions all over the world today. The compromise of banking information and data more often than not leads to fraud. Fraud has become quite a challenge for many banks as any slight br

  • Q : Why do assets equal the sum of total

    Why do overall assets equal the sum of total liabilities and equity?  Describe.            Assets = Liabilities + EquityAssets are the items of value business owns. Liabilities ar

  • Q : Explain euro Normal 0 false false false

    Normal 0 false false

  • Q : Explain Detailed Budget Adjustments

    Detailed Budget Adjustments: Department Detailed Budget Adjustments are comprised in department budget displays to give the reader a snapshot of proposed expenses and position adjustments in the department, why tho

  • Q : Chartered banks Normal 0 false false

    Normal 0 false false