a. What is M1 in Ironmania? $ million b. What is M2 in Ironmania? $ million Assume that the following asset values (in millions of dollars) exist in Ironmania:| Category | Value (Millions) ||-------------------------------------------------------------------|-------------------|| Federal Reserve Notes in circulation | $750 || Money market mutual funds (MMMFs) held by individuals | 400 || Corporate bonds | 300 || Iron ore deposits | 50 || Currency in commercial banks | 100 || Savings deposits, including money market deposit accounts (MMDAs) | 140 || Checkable deposits | 1,500 || Small-denominated (less than $100,000) time deposits | 100 || Coins in circulation | 40 |This table provides a snapshot of various financial assets in Ironmania, detailing their respective values in millions of dollars. The largest category is checkable deposits, while iron ore deposits have the smallest value among the listed assets.

The two halves of the money supply, M1 and M2, represent the various forms of money that are used in an economy. The most liquid assets are found in M1. All of the components of M1 along with other assets that are less liquid but may still be turned into cash or used as a medium of exchange are referred to as M2. It is a broader word for money.a) M1 = $2290 millionb) M2 = $2930 million

Answered: What is M1 in Ironmania? $…

Business

Economics

What is M1 in Ironmania? $ million b. What is M2 in Ironmania? $ million

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: MACROECONOMIC

A: Money supply refers to the money stock held by public during a year. And there are various…

Q: 13. Rashad and Brianna decide to go on a vacation. As a result, they withdraw $5,000 from their…

A: "M1 is a measure of money stock which includes currency, coins held by the non-bank public,…

Q: The table below shows hypothetical values, in billions of dollars, of different forms of money. Use…

A: The objective of the question is to calculate the M1 and M2 money supplies for each year and their…

Q: Each worker gets equal pay. Fill in Average Product and Marginal Product. At what input level will…

A: Average product is the output produced by each unit of worker and marginal product is the additional…

Q: The table to the right shows hypothetical values, in billions of dollars. Use the table to calculate…

A: Money supply refers to the total amount of currency and easily accessible funds within an economy,…

Q: Suppose your bank raises its minimum-balance requirement for free checking on checking accounts by…

A: The M2 and M1 numbers are carefully watched as measures of the total money supply. M1 (cash and…

Q: Distinguish between M1 and M2. What are near monies?

A: The money supply is the entire amount of money in circulation (cash, coins, and bank account…

Q: Which of the following is not included in M1? coins credit cards paper money O checking deposits

A: M1 money supply is the narrow form of money that only include cash and liquidity Monetary…

Q: 1) Suppose your bank raises its minimum-balance requirement for free checking on checking accounts…

A: Question 1:Option a) M1 rises by $500, M2 falls by $500: This option is incorrect because it states…

Q: Joseph transfers $1000 from his money market fund to his checking account. This transaction…

A: The money supply is the total amount of currency and other liquid assets in a country's economy on a…

Q: If people can use their smartphone to make payments, will currency disappear? How will the…

A: M1 money supply is majorly the sum of currency and chequable depositsM1 has two major…

Q: Until 1933, the Unites States was on the gold standard, and people could receive gold from the…

A: The total quantity of money that is readily usable in an economy at any given time—including…

Q: 5. The Federal Reserve's organization There are Federal Reserve regional banks. The Federal…

A: "The Federal Reserve is the central banking system of U.S.".

Q: Can I ask how do you calculate M1 and M2 ? Thanks

A: Money supply refers to the amount of currency in the form of coins, paper notes, or demand deposits…

Q: Use the following table on the components of money in a hypothetical economy to do exercises 11 and…

A: Money supply is categorize into four group in United States, M1, M2, M3 and M4 which are called…

Q: Will M2 increase if banks loan

A: The answer is: YES.

Q: Small-denomination time deposits are included in which of the following measures of the money supply…

A: A time deposit is the deposit in a financial institution which has a specific maturity period. The…

Q: Define M1 and M2. Which is bigger?

A: M1 money supply incorporates those monies that are extremely fluid like money, checkable (request)…

Q: Banks can make loans as long as they have O excess government securities. O required reserves. O…

A: In the banking sector, lending is one of the crucial functions of a bank because it provides income…

Q: Which monetary aggregate resembles money in that it is directly and immediately usable as a medium…

A: M1 includes physical currency and coins, demand deposits, and other checkable deposits. M1 is the…

Q: Q12. The following is hypothetical financial information about the US economy. What is M1 and M2?…

A: The currency and cash in the economy are regulated by the central bank. The supply of money includes…

Q: The value of M2 is $6400 and the value of M1 is $3300 Calculate the value of savings deposit with…

A: The given information is as follows:- M2 components of money supply= $6400 M1 component of money…

Q: l makes a deposit into her savings account at the local bank with $100 in cash. As a result of…

A: M1 = cash or coins held by public + demand or checkable deposits + traveller checks M2 = M1 +…

Q: Which two of the following fifinancial institutions offer checkable deposits included within the M 1…

A: Financial Institutes are responsible for the ordinally and regulated flow of money supply. M1 is…

Q: Suppose Shanna withdraws $7,500 from her money-market mutual fund and deposits this money into her…

A: M1 consists of currency plus checking deposits. M2 consists of M1 plus the personal savings deposit,…

Q: The table below provides data for a hypothetical economy. Currency outside chartered banks$27…

A: Money supply:The money supply is the total money that is circulated in an economy. The central bank…

Q: Suppose you pay your tuition fees from your currency holdings and the university deposits the money…

A: The money supply refers to the total amount of money available in an economy at a given point in…

Q: Suppose you transfer $500 from your savings deposit account to your checking deposit accou what is…

A: please find the answer below.

Question

a. What is M1 in Ironmania?

$ million

b. What is M2 in Ironmania?

$ million

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Write an introduction

VIEW

Step 2: a) Compute M1

VIEW

Step 3: b) Compute M2

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Which group in the federal goverment is responsible for counting M1 and M2 money amounts? A. Department of the Treasury B. US Mint C. Internal Revenue Service D. Federal Reserve
If the reserve ratio is .05 and the amount of currency is 300, what is the money supply? Only typed answer and don't use chat gpt
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 $84 Demand deposits 81 Money market funds 45 Other checkable deposits 38 Savings deposits 466 Small time deposits 23 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
K Pedro takes $200 from his money market fund and deposits the $200 in his checking account. What is the immediate change in M1 and M2? A. M1 increases and M2 decreases by $200. B. M1 increases by $200 and M2 does not change. C. M1 does not change and M2 does not change. D. M1 decreases and M2 increases by $200. E. Both M1 and M2 decrease by $200.
1. From 2009 to 2010, per capita real gross domestic product (GDP) in country C grew by 2.8 percent. Given that price level increased by 2 percent and the population grew by 1 percent, how much was the growth rate of the real GDP? 2. You withdraw $100 from your checking account. How much does M1 change? How much does M2 change?
Coins in people's pockets are A. included in M1, but not in M2. B. included in M2, but not in M1. C. included in M1 and M2. D. excluded from M1 and M2 because people can easily exchange them for Federal Reserve Notes.
If people decide to increase the ratio of currency they hold relative to the amount of transactions accounts they hold, the M2 multiplier will: a. increase slightly b. increase substantially c. not change d. decrease
Refer to the following table to answer the questions that follow. Checkable deposits Currency Traveler's checks Money market mutual funds Small time deposits Savings deposits Using the table, what is the value of M2? a. $57,500,000 b. $46,500,000 c. $65,000,000 d. $47,500,000 e. $13,500,000 $12,500,000 $34,000,000 $1,000,000 $10,000,000 $7,000,000 $500,000
Traveler's checks are included in... M1 and M2 money supply neither M1 nor M2 money supply M1 money supply only M2 money supply only
John Antonio transfers $5000 from his checking account to his savings account. How are M1 and M2 affected by this decision? a.M1 increases and M2 decreases b.M1 and M2 remain the same c.M1 decreases and M1 increases d.M1 increases and M2 increases e.M1 decreases and M2 decreases
In an economy, savings deposits are $10,000 billion, currency is $1,500 billion, checkable deposits are $4,000 billion, money market funds and other deposits are $1,000 billion, and small time deposits are $200 billion. What are the values of M1 and M2? M1 is _______ and M2 is _______. A. $16,700 billion; $5,500 billion B. $5,500 billion; $16,700 billion C. $15,500 billion; $6,700 billion D. $1,500 billion; $20,700 billion
Calculate the value of M1 if M3 is $14000 million and the net time deposits with banks is $8000 million