Given the following information,calculate M1 and M2.
Small time deposits
$800 billion
Checking deposits
$400 billion
Savings-type accounts
$900 billion
Money market mutual funds
$700 billion
Travelers' checks
$50 billion
Large time deposits
$750 billion
Cash on hand
$150 billion

Question

Quizplus · Accepted Answer

M1 includes currency in circulation, checking deposits, and traveler's checks. Therefore, M1 = $400 billion (checking deposits) + $50 billion (traveler's checks) + $150 billion (cash on hand) = $600 billion.

M2 includes M1 plus savings deposits, small time deposits, and money market mutual funds. Therefore, M2 = M1 + $900 billion (savings deposits) + $800 billion (small time deposits) + $700 billion (money market mutual funds) = $3,150 billion.

Given the Following Information,calculate M1 and M2