Question

Refer to the following table to answer the following questions:

Answer 1

Answer:

Following are the answer to this question:

In question first, the answer is "Option d".

In question second, the answer is "Option e".

In question third, the answer is "Option e".

In question fourth, the answer is "Option e ".

In question fifth, the answer is "Option b".

Explanation:

Given values:

$Checkable \ deposits = \ 400,000,000\\Currency = \ 340,000,000\\Traveler's \ checks = \ 4,000,000\\Money \ market \ mutual \ funds = \ 50,000,000\\Small \ time \ deposits = \ 6,000,000\\Savings \ deposits = \ 850,000,000$

Solution:

• $\text{M1= currency +checkable deposits + travellers check}$

    = $400000000+$340000000+$4000000

    = $744000000

$\bold{\text{M2 = M1 +money market mutual funds + small time deposit+ saving deposit}}$

      =  $744000000 + $50000000+$6000000+$850000000

       = $1,650,000,000

• Saving account deposits, which means its amount of money increased throughout the M2 portion regular savings account. So M2 will grow  
• Its increase in the number of employees may not impact the balance sheet with banks, because each bank maintains its entire cash flow
• For banks, loans are investments if they're lending money as a bank to people. So, it's on income statement asset side