Thank you for visiting Suppose the M2 money supply is 13 trillion including 7 trillion in savings accounts 3 trillion in checking accounts 1 trillion in money market mutual. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
Answer:
M1 is equal to $ 4 trillion
Explanation:
M1 money supplies are liquid money supplies like cash, checkable deposits, traveler's check etc. It is equal to;
M1= coins and currency in circulation + checkable (demand) deposit + traveler's check.
M2 money supply are less liquid and is equated as;
M2 = M1 + savings deposit + money market fund + certificates of deposit + other time deposits.
Savings = $7 trillion
Checkable deposit = $3 trillion
Money market fund = $1 trillion
Currency = $1 trillion
Certificates of deposit = $1 trillion
M1 = currency + checkable deposit
= $1 + $ 3
= $4 trillion.
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Rewritten by : Jeany
