Use the following table to determine the levels of M1 and M2 in the United States. Money Categories in the United States AssetAmount (billions of dollars)Currency$84Demand deposits81Money market funds45Other checkable deposits38Savings deposits466Small time deposits23Traveler's checks5 Instructions: Enter your answers as a whole number. a. Calculate the M1 money supply. $ billion b. Calculate the M2 money supply. $ billion

The money that is supplied in an economy by the central bank is known as the money supply. It can be…

Answered: Asset Amount (billions of dollars)…

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter14: Banking And The Money Supply

Section: Chapter Questions

Problem 1.2P

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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

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

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