Unit 9 Assignment
answer the following questions. Submit
as a Microsoft Word® document to the Dropbox when completed.
1. Determine whether
each of the following is counted in the M1 measure of the money supply:
The coins in your piggy bank.
The funds in your checking account at First
The funds in your savings account at Second
The traveler’s check you have left over from
your trip to Germany.
The available balance on your Citico Gold
2. Refer to the simplified balance sheet for a bank and answer the
the required reserve ratio is 5 percent, how much in excess reserves does this
is the maximum amount this bank can expand its loans?
What will happen to the M1
money supply if it makes the loans in (b) above and those funds are deposited
into another bank by the borrowers?
3. Assume the interest rate on a Treasury bill
is 2 percent and will pay its owner $1,000 when it matures in one year.
What is the price of the
Treasury bill in today’s market?
Suppose that the Fed engages
in open market sales which results in the interest rate on new one-year
Treasury bills rising to 3 percent. What
will happen to the price of these existing Treasury bills with rates of 2
4. Identify each of the following events as:
a) part of an expansionary fiscal
b) part of a contractionary fiscal
c) or not part of fiscal policy
The corporate income tax
rate is increased.
spending is increased.
are allowed to deduct all daycare expenses from their federal income taxes.
individual income tax rate is decreased.
The State of New York builds
a new highway.
Submitting your Assignment
Complete your assignment in this Microsoft
Word® document and save it as Username-MT445Assignment-Unit#.doc (Example:TAllen-MT445Assignment-Unit9.doc).
Submit your file by selecting the Unit 9: Assignment Dropbox by the end of Unit