If currency outside of banks is $800 billion;traveler's checks are $10 billion;checkable deposits owned by individuals and businesses are $700 billion;savings deposits are $4,000 billion;small time deposits are $1,000 billion;and money market funds and other deposits are $800 billion,then M1 equals ________ billion.
A)$7,310
B)$5,800
C)$2,510
D)$1,510
E)$710

Question

Quizplus · Accepted Answer

M1 includes currency outside of banks, traveler's checks, and checkable deposits. Therefore, M1 = $800 billion (currency) + $10 billion (traveler's checks) + $700 billion (checkable deposits) = $1,510 billion.

If Currency Outside of Banks Is $800 Billion;traveler's Checks Are