Answer to Question #5346 in Finance for Lisa DeBerry

Question

Determine the size of the M1 money supply using the following
information.
Currency plus traveler’s checks $25 million
Negotiable CDs $10 million
Demand deposits $13 million
Other checkable deposits $12 million

Answer 1

M0 – Physical cash and coin
M1 – All of M0 plus demand deposits, traveler’s checks
M2 – All of M1 plus savings deposits, money market shares
M1 = 25 + 13 = $38 million