Final answer:
Items such as $1 in quarters and $1200 in a checking account fall under M1, while $2,000 in a money market account falls under M2. Traveler's checks also count as M1. A line of credit, however, does not fit into M1 or M2 as it's a form of credit.
Step-by-step explanation:
To answer which items are classified under M1, M2, or neither, it's important to understand what each money supply represents. M1 includes money in circulation that is readily available for spending and usually consists of currency and checkable deposits. M2 includes M1 plus savings deposits, small-denomination time deposits, and non-institutional money-market funds. With that understanding:
- The $5,000 line of credit on your Bank of America card is neither M1 nor M2. It is a form of credit, not money supply.
- $50 worth of traveler's checks you have not used yet is part of M1 as it's considered a checkable deposit.
- $1 in quarters in your pocket is part of M1 since it's currency in circulation.
- $1,200 in your checking account falls under M1 since it is a checkable deposit.
- $2,000 you have in a money market account would be part of M2, as it includes money market accounts.