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    Exercise 10: Monetary Policy: M1 Vs M2

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    Kenon Joseph Hinanay
    The document defines and distinguishes between several key economic concepts related to monetary policy. It contrasts money supply and money demand, money and wealth, flows and stocks. It also distinguishes between different measures of money supply (M1 vs M2, M3 vs M4) and different types of investments (bonds vs stocks). Finally, it defines nominal income versus real income and provides sources for further information.

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    Exercise 10: Monetary Policy: M1 Vs M2

    Uploaded by

    Kenon Joseph Hinanay
    10 views2 pages
    The document defines and distinguishes between several key economic concepts related to monetary policy. It contrasts money supply and money demand, money and wealth, flows and stocks. It also distinguishes between different measures of money supply (M1 vs M2, M3 vs M4) and different types of investments (bonds vs stocks). Finally, it defines nominal income versus real income and provides sources for further information.

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    Monetary Policy

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    The document defines and distinguishes between several key economic concepts related to monetary policy. It contrasts money supply and money demand, money and wealth, flows and stocks. It also distinguishes between different measures of money supply (M1 vs M2, M3 vs M4) and different types of investments (bonds vs stocks). Finally, it defines nominal income versus real income and provides sources for further information.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    10 views2 pages

    Exercise 10: Monetary Policy: M1 Vs M2

    Uploaded by

    Kenon Joseph Hinanay
    The document defines and distinguishes between several key economic concepts related to monetary policy. It contrasts money supply and money demand, money and wealth, flows and stocks. It also distinguishes between different measures of money supply (M1 vs M2, M3 vs M4) and different types of investments (bonds vs stocks). Finally, it defines nominal income versus real income and provides sources for further information.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Exercise 10: Monetary Policy

    Direction: Write your answer in the space provided.

    Money supply vs Money demand

    Money supply is the amount of money supplied in the public for the people to consume. While
    Money demand is the demand of people of money for their daily consumption.

    Money vs Wealth

    Money is the medium or current used in trading. While wealth is the amount of money r
    properties a person have.

    Flow vs stock

    A flow, or flow variable, is an economic magnitude describing behavior that occurs over time


    and is therefore meaningful only relative to the unit of time. While A stock is a type of
    investment that represents an ownership share in a company.

    M1 vs M2

    M1 money supply includes those monies that are very liquid such as cash, checkable (demand)
    deposits, and traveler's checks. While M2 money supply is less liquid in nature and
    includes M1 plus savings and time deposits, certificates of deposits, and money market funds. 

    M3 vs M4

    The M3 measurement includes assets that are less liquid than other


    components of the money supply and are referred to as “near, near money.” While the M4
    money supply is defined as a measure of notes and coins in circulation (M0) + bank accounts.

    Bonds vs Stocks

    A bond is a fixed income instrument that represents a loan made by an investor to a borrower
    (typically corporate or governmental). While a stock is a type of investment that represents an
    ownership share in a company.

    Nominal Income vs Real Income

    the nominal values of something are its money values in different years. While  real values adjust
    for differences in the price level in those years.
    www.econlib.org 
    www.investopedia.com
    traders-paradise.com 
    courses.lumenlearning.com

    www.investorwords.com

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