Question

_____________ Checking is free to all customers, however customers between the ages of _______ - ________ can have up to five ATM network charges waived each month.

Answer 1

The M1 money supply includes cash, checking account balances, and demand deposits. The M2 money supply includes M1 plus savings accounts, money market accounts, and traveler's checks. Line of credit and traveler's checks are neither part of M1 nor M2.

Step-by-step explanation:

The items in the M1 money supply include:

1. Your $5,000 line of credit on your Bank of America card - This is considered a demand deposit and is part of M1.
2. $1 in quarters in your pocket - Physical currency is part of M1.
3. $1200 in your checking account - Checking account balances are included in M1 as they can be easily accessed and used for transactions.

The items in the M2 money supply include:

1. $50 dollars' worth of traveler's checks you have not used yet - Traveler's checks are included in M2 as they can be easily converted into cash.
2. $2000 you have in a money market account - Money market accounts are considered part of M2 as they are highly liquid and can be easily converted into cash.

The $5,000 line of credit on your Bank of America card and the $50 dollars' worth of traveler's checks are neither part of M1 nor M2 as they are not physical currency or easily accessible funds.