Table # 1Type of MoneySmall time depositsLarge time depositsDemand depositsOther checkable depositsSavings depositsTravelers' checksMoney market mutual fundsU.S. CurrencySpecial Drawing Rights (SDR)Miscellaneous categories of M2Amount (in $billion)$75$80$75$14$10$11$15$201$10$253RM 28. Refer to Table1. What is the M1 money supply?A) $200 billion.B) $216 billion.C) $226 billion.D) $301 billion29. Refer to Table 1. What is the M2 money supply?A) $426 billion.B) $325 billion.C) $351 billion.D) $471 billion

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28. Refer to Table1. What is the M1 money supply? A) $200 billion. B) $216 billion. C) $226 billion. D) $301 billion

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

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Table # 1
Type of Money
Small time deposits
Large time deposits
Demand deposits
Other checkable deposits
Savings deposits
Travelers' checks
Money market mutual funds
U.S. Currency
Special Drawing Rights (SDR)
Miscellaneous categories of M2
Amount (in $billion)
$75
$80
$75
$14
$10
$11
$15
$201
$10
$25
3
RM

28. Refer to Table1. What is the M1 money supply?
A) $200 billion.
B) $216 billion.
C) $226 billion.
D) $301 billion
29. Refer to Table 1. What is the M2 money supply?
A) $426 billion.
B) $325 billion.
C) $351 billion.
D) $471 billion

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