Question

The table below shows hypothetical values, in billions of dollars, of different forms of money. a. Use the table to calculate the M1 and M2 money supplies for each year, as well as the growth rates of the M1 and M2 money supplies from the previous year b. Why are the growth rates of M1 and M2 so different? Explain. 2015 900 680 5,500 1,214 1,000 830 4 1,986 2016 920 681 5,780 1,245 972 861 4 2,374 2017 925 679 5,968 1,274 980 1,123 2018 931 688 6,105 1,329 993 1,566 A. Currency Money market mutual fund shares Saving account deposits Money market deposit accounts emand and checkable deposits Small denomination time deposits Traveler's checks 3-month treasury bills 2,436 C. Go to the St. Louis Fed's data web site called FRED, Graph M1 and M2 growth on the same graph over the time period 1960-2017 using monthly seasonally adjusted data. Include the graph in your submission.*

Answer 1

	2015	2016	2017	2018
A. Currency	900	920	925	931
E. Demand and Checkable Deposits	1000	972	980	993
G. Travellers checks	4	4	3	2
M1	1904	1896	1908	1926
B. Money Market Mutual Fund Shares	680	681	679	688
C. Savings account deposits	5500	5780	5968	6105
D. Money Market Deposit accounts	1214	1245	1274	1329
F. Small denomination time deposits	830	861	1123	1566
M2	8224	8567	9044	9688
Growth rates
		2016	2017	2018
M1
		-0.004201681	0.006329114	0.009434					.,,,,,,,,,,,w4q
Growth rate of M1=(( Current year supply of M1-Previous Year supply of M1)/Previous year supply of M1))*100		-0.4	0.6	0.9
Growth rate of M2=(( Current year supply of M2-Previous Year supply of M2)/Previous year supply of M2))*100		0.041707198	0.055678767	0.071207
		4.2	5.6	7.1
M1 is physical money and can be converted to cash easily
Cash
Coins
Demand deposits
Travellers checks
Checking accounts
M2 is a measure of the money supply that includes all elements of M1 as well as "near money."
M1 includes cash and checking deposits, while near money refers to savings deposits, money market securities, mutual funds and other time deposits.