Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 25, Problem 10APA
To determine
Identify the immediate changes in M1 and M2.
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You sell $10,000 of money market mutual fund shares and deposit them in a checking account with a bank. What is the effect on M1 and M2?
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What is the difference between M1 and M2? Why aren’t M1 and M2 just combined?
Chapter 25 Solutions
Macroeconomics
Ch. 25.1 - Prob. 1RQCh. 25.1 - Prob. 2RQCh. 25.1 - Prob. 3RQCh. 25.1 - Prob. 4RQCh. 25.1 - Prob. 5RQCh. 25.2 - Prob. 1RQCh. 25.2 - Prob. 2RQCh. 25.2 - Prob. 3RQCh. 25.2 - Prob. 4RQCh. 25.2 - Prob. 5RQ
Ch. 25.3 - Prob. 1RQCh. 25.3 - Prob. 2RQCh. 25.3 - Prob. 3RQCh. 25.3 - Prob. 4RQCh. 25.3 - Prob. 5RQCh. 25.4 - Prob. 1RQCh. 25.4 - Prob. 2RQCh. 25.4 - Prob. 3RQCh. 25.5 - Prob. 1RQCh. 25.5 - Prob. 2RQCh. 25.5 - Prob. 3RQCh. 25.5 - Prob. 4RQCh. 25.5 - Prob. 5RQCh. 25.6 - Prob. 1RQCh. 25.6 - Prob. 2RQCh. 25.6 - Prob. 3RQCh. 25.6 - Prob. 4RQCh. 25 - Prob. 1SPACh. 25 - Prob. 2SPACh. 25 - Prob. 3SPACh. 25 - Prob. 4SPACh. 25 - Prob. 5SPACh. 25 - Prob. 6SPACh. 25 - Prob. 7SPACh. 25 - Prob. 8SPACh. 25 - Prob. 9SPACh. 25 - Prob. 10APACh. 25 - Prob. 11APACh. 25 - Prob. 12APACh. 25 - Prob. 13APACh. 25 - Prob. 14APACh. 25 - Prob. 15APACh. 25 - Prob. 16APACh. 25 - Prob. 17APACh. 25 - Prob. 18APACh. 25 - Prob. 19APACh. 25 - Prob. 20APACh. 25 - Prob. 21APACh. 25 - Prob. 22APACh. 25 - Prob. 23APACh. 25 - Prob. 24APACh. 25 - Prob. 25APACh. 25 - Prob. 26APACh. 25 - Prob. 27APA
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- why does m2 fall and not remain unchanged? doesn't M2 consist of both M1 and M2? so when M1 rise (due to more cash), savings account (which is under M2) will drop by the same amount as M1 rise, hence overall M2 will remain unchanged?arrow_forwardDetermine whether each of the following is included in both M1 and M2 or M2 only: a. a Connecticut quarter b. a savings account at a local savings bank c. a share draft account at a credit union d. money market deposit accounts e. American Express travelers’ checksarrow_forwardIf you take $100 out of your piggy bank at home and deposit it into your checking account, how did the value of M1 change? How did the value of M2 change as a result of your deposit?arrow_forward
- Your answer is incorrect. The economy of Greatstown currently has $60.00 million worth of currency in circulation, $2.00 million worth of traveler's checks, $5.00 million in small time-deposits, and $30.00 million in savings deposits. Total M1 is equal to $120.00 million. Calculate the amount of checkable deposits in Greatstown: 58000000arrow_forwardDoes m2 , m1 or m3 include current deposit at bank ??arrow_forwardGiven the following information, what are the values of M1 and M2? Small time deposits $750 billion Demand deposits and other $420 billion checkable deposits Savings deposits $700 billion Money market mutual $1,550 billion funds Travelers' checks $25 billion Large time deposits $2,200 billion Currency $300 billion Miscellaneous categories in $60 billion M2 Suppose large time deposits of $1,200 billion mature and people decide to deposit $180 billion of this amount in checking accounts, $800 billion in savings accounts, and the remaining amount in money market mutual funds. How do these actions affect M1 and M2?arrow_forward
- If you take $100 out of your piggy bank and deposit it in your checking account, how did M1 change? Did M2 change?arrow_forwardCalculate M1 if M3 is $20,000 and net time deposit with banks is $17,000arrow_forwardJohn deposits $1,600 into his checking account. If the reserve ratio is 5%, what are the required and excess reserves? Required reserves: $ Excess reserves: $arrow_forward
- The economy of Quarterville currently has a level of M1 equal to $49.000. If there are $38,000 worth of savings deposits, $89.000 worth of money market funds, and $32,000 worth of time deposits in Quarterville, calculate M2:arrow_forwardQuestion 17 Which of the following is included in M2, but not in M1? o checking account deposits O cash and coins O time deposits O traveler's checksarrow_forwardWhat does m1,m2 m3 include in detail ??arrow_forward
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