Final answer:
The daily maximum withdrawal amount for an EDD cardholder at an ATM is $500. M1 and M2 money supply categories define the liquidity of money; with coinage in your pocket, traveler's checks, and checking account money considered M1, while money in money market accounts falls under M2. The $3,500 per person in cash circulation is largely not carried by individuals but used across the economic system.
Step-by-step explanation:
The daily maximum amount that an EDD cardholder may withdraw at an ATM is option b) $500. Now, let's discuss the concepts of M1 and M2 money supply, which are categories that define the money circulating within an economy.
- a. Your $5,000 line of credit on your Bank of America card is neither M1 nor M2 as it represents potential borrowing, not actual money.
- b. $50 dollars' worth of traveler's checks you have not used yet are included in M1 as they are checks available for spending.
- c. $1 in quarters in your pocket is part of M1 as it is physical currency in circulation.
- d. $1,200 in your checking account is part of M1 as it is money readily accessible for transactions.
- e. $2,000 you have in a money market account is part of M2 as it includes M1 and short-term time deposits like money market accounts that are not as liquid as those in M1.
Answering question 24, the total amount of U.S. currency in circulation divided by the U.S. population does come out to about $3,500 per person. However, much of this cash is not carried by individuals. It is held in bank vaults, financial institutions, retail operations, and is spread throughout the larger economic system for transactions and reserves.