Final answer:
In terms of the monetary aggregates, traveler's checks and currency in circulation are part of M1, while money in checking accounts is also M1. Money in money market accounts is part of M2. the correct option is (B).
Step-by-step explanation:
The terms non-revolving and revolving refer to types of credit. Non-revolving credit is a type of loan with a fixed amount of money and set repayment schedule. Revolving credit is a credit line that can be borrowed against and repaid periodically, with a variable interest rate based on the borrower's credit rating. The money can be borrowed again up to a certain limit once it has been repaid.
a. Your $5,000 line of credit on your Bank of America card is an example of a revolving credit account and does not fall into M1 or M2 as it represents potential borrowing, not actual deposits.
b. $50 dollars' worth of traveler's checks you have not used yet is counted in M1 because traveler's checks are a component of this monetary aggregate.
c. $1 in quarters in your pocket is also in M1 because it is considered to be 'currency in circulation'.
d. $1200 in your checking account is part of M1 as it is a demand deposit and easily accessible for transactions.
e. $2000 you have in a money market account is in M2, which includes savings deposits and accounts like money market accounts that are more liquid than other time deposits but less so than M1 components.