Answer to Question #32947 in Economics of Enterprise for Tony

Question

Is this correct?
2-1-Determine the size of the M1 money supply using the following information.
Data Dollars in Millions
Currency plus travellers checks 25
Negotiable CDs 10
Demand deposits 13
Other Checkable deposits 12

M0-Physical Cash and coin
M1- All of M0+ demnad, market
M2-All of M1+savings, market
M=25+1= 38

Answer 1

Determine the size of the M1 money supply:
Currency plus travellers checks 25
Negotiable CDs 10
Demand deposits 13
Other Checkable deposits 12

M0-Physical Cash and coin
M1- All of M0 + demand deposits
M2-All of M1+ savings
So, M1 = currency plus travellers checks + demand deposits = 25 + 13 = 38 million dollars