Final answer:
A monthly bank statement includes checks and other debits, deposits and other credits, and the beginning and end-of-period balances. Checks not yet cleared and errors, like credits decreasing the account, are not included. In terms of M1 and M2, cash, checking account balances, and traveler's checks are part of M1, while money in a money market account falls under M2.
Step-by-step explanation:
On a monthly bank statement, you would typically find the following items:
- Checks and other debits decreasing the account during the period (A)
- Deposits and other credits increasing the account during the period (B)
- Beginning-of-period balance in the account (D)
- End-of-period balance in the account (E)
However, you would not see checks that the company has written but have not cleared the bank yet (C) on a bank statement, as this represents outstanding checks. Checks and other credits do not decrease the account; thus, item F is incorrect and not featured on a bank statement.
For the provided items in relation to M1 and M2 money supply:
- Your $5,000 line of credit on your Bank of America card is neither in M1 nor M2 because it is a credit line and not actual money in circulation (a).
- $50 dollars' worth of traveler's checks you have not used yet are considered part of M1 because they are checks that can directly be used for transactions (b).
- $1 in quarters in your pocket is part of M1, as it is cash in circulation (c).
- The $1200 in your checking account is part of M1, as it constitutes checkable deposits (d).
- $2000 you have in a money market account would be part of M2, as it includes M1 as well as savings deposits, which typically include money market accounts (e).