Given the following information, what are the values of M1 and M2? Small time deposits
$650 billion
Demand deposits and other checkable deposits
$300 billion
Savings deposits
$750 billion
Money market mutual funds
$600 billion
Traveler's checks
$25 billion
Large time deposits
$600 billion
Currency
$100 billion
Miscellaneous categories in M2
$25 billion
A)M1 = $400 billion, M2 = $2,475 billion.
B)M1 = $125 billion, M2 = $3,025 billion.
C)M1 = $425 billion, M2 = $2, 450 billion.
D)M1 = $425 billion, M2 = $1,875 billion.

Question

Quizplus · Accepted Answer

M1 includes currency, demand deposits, travelers checks, and other checkable deposits. 
M1 = $100 billion (currency) + $300 billion (demand deposits) + $25 billion (traveler's checks) = $425 billion
M2 includes M1 plus savings deposits, small time deposits, and money market mutual funds.
M2 = M1 + $650 billion (small time deposits) + $750 billion (savings deposits) + $600 billion (money market mutual funds) + $25 billion (miscellaneous categories in M2) = $425 billion + $650 billion + $750 billion + $600 billion + $25 billion = $2,450 billion.

Given the Following Information, What Are the Values of M1