Question

The terms below are measures or individual components of the money supply. Specifically considering the money supply of the United States, rank these items from largest to smallest in terms of dollar value. M2, currency, travelers checks, balances in savings accounts, M1

Answer 1

1. M2
2. balances in savings accounts
3. M1
4. currency
5. travelers checks

Step-by-step explanation:

The money supply is the total amount of money available in an economy. It includes:

• M1 includes coins and notes (bills) in circulation, travelers' checks and other money equivalents that are easily liquidated.
• M2 includes M1 plus short term bank deposits (including savings accounts) and 24 hour money market funds.
• M3 includes M2 plus long term bank deposits and money markets with more than 24 hour maturity.