Use the following to answer questions :
-(Scenario: Monetary Base and Money Supply) Look at the scenario Monetary Base and Money Supply. How much is M1?

Question

Use the following to answer questions : 
-(Scenario: Monetary Base and Money Supply) Look at the scenario Monetary Base and Money Supply. How much is M1?

Quizplus · Accepted Answer

M1 is defined as the sum of currency in circulation, demand deposits, and other checkable deposits. From the scenario, we can see that currency in circulation is $80 billion, demand deposits are $200 billion, and other checkable deposits are $50 billion. Therefore, M1 = $80 billion + $200 billion + $50 billion = $330 billion. So, the correct answer is B.

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