In an economy, the amount of money held in currency and coins is $3,500, the amount of money held as traveler's check is $1,000, the amount of money held as checkable deposits is $2,000, the amount of money held in savings deposit is $4,000, and the amount of money held with retailed money market mutual funds is $700.M1 in the economy equals

Question

Quizplus · Accepted Answer

M1 in the economy is the sum of currency and coins held by the public, traveler's checks, demand deposits, and other checkable deposits. So, M1 = $3,500 + $1,000 + $2,000 = $6,500. Savings deposits and retail money market mutual funds are not included in M1. Therefore, option B is the correct answer.

In an Economy, the Amount of Money Held in Currency