As of 2010 the outstanding U.S. currency is $872 billion, which implies that the typical U.S. citizen holds $2,800 in cash. Is this an accurate inference? Why?
A) Yes; because dividing total currency of $872 billion by total U.S. population in 2010 roughly works out to $2,800 per person
B) No; because criminals and foreigners hold large sums of dollars, so the average citizen holds far less.
C) No; because the average citizen probably does not have $2800 in her checking account to back up all that cash
D) Yes; because the Fed rarely makes accounting mistakes when computing M1
E) none of the above

Question

Quizplus · Accepted Answer

The inference that the typical U.S. citizen holds $2,800 in cash is not accurate because criminals and foreigners hold large sums of dollars, which would skew the calculation. Additionally, the outstanding U.S. currency includes cash held by banks and other institutions, not just individual citizens.

As of 2010 the Outstanding U