Question

Money aggregates

Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes.

a. Deborah has $6,000 in a six-month certificate of deposit (CD).

b. Van has a roll of quarters that he just withdrew from the bank to do laundry.

c. Carlos has $2,000 in a savings account

Answer 1

Step-by-step explanation:

* M1 = currency in circulation + checking deposits

* M2= M1 + short term money deposits + 24 hour market funds

a) Deborah CD - M2

b) Van - M1 and M2

c) Carlos savings account - M2