Question

In June 2013, currency held by individuals and businesses was $1,124 billion; traveler’s checks were $4 billion; checkable deposits owned by individuals and businesses were $1,402 billion; savings deposits were $6,884 billion; time deposits were $583 billion; and money market funds and other deposits were $647 billion. Calculate M1 and M2 in June 2013.

Answer 1

M1 $2,530 billion

M2 $10,644 billion

Step-by-step explanation:

• M1 = Currency held + Travelers check + Checkable deposits

= $(1,124 + 4 + 1,402) billion = $2,530 billion

• M2 = M1 + Savings deposits + Time deposits + Money market funds

= $(2,530 + 6,884 + 583 + 647) billion = $10,644 billion