1. If the random variable z is the standard normal score and a < 0, is it true that P(z < a) < 0? Why or why not? Solution 1. No, it isn\'t true. Because there are no negative probabilities. The P(Z < a) must be between 0 and 1. If a is < 0, then the probability will be < 0.5..

1. 1. If the required reserve ratio is 0.2, the level of deposits is $1,000, the level of currency held by
the public is $100, the level of excess reserves is $100, the level of money market funds is
$1,000 and the level of time deposits is $2,000, then m2is ____.
11
3.5
8.5
20.5
2. The required reserve ratio is 0.1, the level of deposits is $1,000, the level of currency held by
the public is $500, and the level of excess reserves is $100. If the Fed increases the monetary
base by $300, then M1 rises by approximately _____.
$300
$643
$2,250
$3,000A.
11B.
3.5C.
8.5D.
20.5
Solution
m2 = [1 + (C/D) + (T/D) + (MMF/D)]