Question

Item Dollars In Billions

Checkable Deposits $600
Small Time Deposits $700
Currency $500
Money-Market Mutual Funds Held by Businesses $1,200
Savings Deposits and Money-Market Deposit Accounts $2,500
Money-Market Mutual Funds Held by Individuals $800



What is the size of the M1 money supply?
a. $800
b. $1,900
c. $1,100
d, $2,600

Answer 1

The size of the M1 money supply is $1,900 billion.

Step-by-step explanation:

The M1 money supply includes currency, checkable deposits, and money held in money-market mutual funds by individuals. From the given information, the size of the M1 money supply can be calculated by adding the dollar values of checkable deposits, currency, and money-market mutual funds held by individuals:

• Checkable Deposits: $600 billion
• Currency: $500 billion
• Money-Market Mutual Funds Held by Individuals: $800 billion

Adding these values, the size of the M1 money supply is $600 billion + $500 billion + $800 billion = $1,900 billion.