A Bank Has $250 in Checking Deposits,$1,000 in Savings Deposits,$1,200

question 321

Multiple Choice

A bank has $250 in checking deposits,$1,000 in savings deposits,$1,200 in time deposits,$1,000 in loans to businesses,$400 in outstanding credit card balances,$800 in government securities,$25 in currency in its vault,and $25 in deposits at the Fed.Of these,________ are part of M2.

• A)$3,450
• B)$2,450
• C)$2,850
• D)$2,200
• E)$2,600

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Definitions:

Normative Statement

A statement that expresses a value judgment or opinion about what ought to be, rather than what is empirically observable.

Normative Statement

A statement that expresses a value judgment about whether a situation is desirable or undesirable. It reflects opinions rather than facts.

Positive

Refers to factual statements or assertions that can be tested or verified.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by GDP.