1. For a. and b., say whether each is included in M1:

a. coins in circulation: included in M1/not included in M1 (choose one)

b. checkable deposits (i.e., checking account balances): included in M1/not included in M1 (choose one)

2. For a. and b., say whether each is included in M2:

a. currency in circulation: included in M2/not included in M2 (choose one)

b. a physical debit card: included in M2/not included in M2 (choose one)

3. Suppose you have $1,200 in your savings account at your bank. Then, you suddenly take the $1,200 and transfer it to your checking account.

a. As a result of your transfer, did M1 change?

b. As a result of your transfer, did M2 change?

4. Suppose the central bank suddenlydecreasesthe reserve requirement. What effect would that decrease have on the money supply?

5. The Federal Reserve has a unique ability that gives it the power to purchase bonds using open market operations. What is that ability?

6.

a. Supposenominal GDPincreases, and at the same time themoney supplydecreases. What will happen to thevelocityof money as a result?

b. Supposereal GDPandvelocityof money stay constant, but at the same time theprice leveldecreases. What will happen to themoney supplyas a result?

7. ppose that economic decline in Europe leads financial markets to anticipate adepreciationin the region's currency, the euro. What would be the likely impact on the following:

a. demand for euros?

b. supply of euros?

c. Exchange rate of euros compared to the U.S. dollar (ceteris paribus)?

8. Briefly discuss whether astrongerU.S. dollar is "good" or "bad" for each of the following types of groups:

a. a foreign tourist in the United States

b. a U.S. tourist abroad

c. a firm importing foreign goods into the United States

9.Suppose interest rates on the Mexican pesoincreasecompared to the rest of the world. What would be the likely impact on the following:

a. demand for Mexican pesos?

b. supply of Mexican pesos?

c. Exchange rate of Mexican pesos compared to the U.S. dollar (ceteris paribus)?

10. Answer parts a. and b. below.

a. What is the name of the exchange rate that equalizes the prices of internationally traded goods across countries?

b. Briefly explain why the exchange rate from question 10a makes it easier to compare economic statistics

Hi please answer these question correctly it is very important