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natali 33 [55]
3 years ago
9

Suppose the m2 money supply is $13 trillion, including: $7 trillion in savings accounts $3 trillion in checking accounts $1 tril

lion in money market mutual funds $1 trillion in certificates of deposit $1 trillion in currency what is the m1 money supply
Computers and Technology
1 answer:
tia_tia [17]3 years ago
6 0

Answer:

M1 is equal to $ 4 trillion

Explanation:

M1 money supplies are liquid money supplies like cash, checkable deposits, traveler's check etc. It is equal to;

M1= coins and currency in circulation + checkable (demand) deposit + traveler's check.

M2 money supply are less liquid and is equated as;

M2 = M1 + savings deposit + money market fund + certificates of deposit + other time deposits.

Savings = $7 trillion

Checkable deposit = $3 trillion

Money market fund = $1 trillion

Currency = $1 trillion

Certificates of deposit = $1 trillion

M1 = currency + checkable deposit

= $1 + $ 3

= $4 trillion.

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