. In May 2017, currency held by individuals and businesses was $1,469 billion; traveler's checks were...

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Question

. In May 2017, currency held by individuals and businesses was $1,469 billion; travelers checks were $2 billion; checkable deposits owned by individuals and businesses were $2,034 billion; savings deposits were $8,958 billion; time depos- its were $355 billion; and money market funds and other deposits were $1,746 billion. Calculate M1 and M2 in May 2017.

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Answer 1

Answer #1

M1 and M2 are measures of the money supply.

Calculate M1 -

M1 = Currency held by individuals and businesses + Traveler's checks + Checkable deposits

M1 = $1,469 billion + $2 billion + $2,034 billion

M1 = $3,505 billion

The M1 is $3,505 billion.

Calculate M2 -

M2 = M1 + Savings deposits + Time deposits + Money market funds and other deposits

M2 = $3,505 billion + $8,958 billion + $355 billion + $1,746 billion

M2 = $14,564 billion

The M2 is $14,564 billion.

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Answer 2

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. In May 2017, currency held by individuals and businesses was $1,469 billion; traveler's checks were...

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. In May 2017, currency held by individuals and businesses was $1,469 billion; traveler's checks were...

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