Use the following table to determine the levels of M1 and M2 in the United States. Money Categories in the United States Asset Amount (billions of dollars) Currency $86 Demand deposits 83 Money market funds 45 Other checkable deposits 39 Savings deposits 472 Small time deposits 24 Traveler's checks 5 Instructions: Enter your answers as a whole number. a. Calculate the M1 money supply. $ billion b. Calculate the M2 money supply. $ billion
Use the following table to determine the levels of M1 and M2 in the United States. Money Categories in the United States Asset Amount (billions of dollars) Currency $86 Demand deposits 83 Money market funds 45 Other checkable deposits 39 Savings deposits 472 Small time deposits 24 Traveler's checks 5 Instructions: Enter your answers as a whole number. a. Calculate the M1 money supply. $ billion b. Calculate the M2 money supply. $ billion
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter12: Money, Banking And The Financial System
Section: Chapter Questions
Problem 7WNG
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Question
Use the following table to determine the levels of M1 and M2 in the United States.
Money Categories in the United States
Asset | Amount (billions of dollars) |
Currency | $86 |
83 | |
45 | |
Other checkable deposits | 39 |
Savings deposits | 472 |
Small time deposits | 24 |
Traveler's checks | 5 |
Instructions: Enter your answers as a whole number.
a. Calculate the M1 money supply.
$ billion
b. Calculate the M2 money supply.
$ billion
Expert Solution
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Step 1
M1 and M2 are money supply which are also part of narrow money.
M1 includes currency, demand deposits, and traveler's check.
M2 consists of all the components of M1 in addition to savings and time deposits, money market funds and certificate of deposit.
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