Asked by Dharmesh Kharel on Jul 05, 2024
Verified
Refer to Table 29-2. What is the M2 money supply in Florencial?
A) $1,300 billion
B) $580 billion
C) $880 billion
D) $1,000 billion
Money Supply
The total amount of monetary assets available in an economy at any given time, including cash, bank deposits, and other liquid assets.
Time Deposits
Banking or financial products that require the depositor to leave funds untouched for a pre-specified period of time in exchange for a higher interest rate.
- Determine the elements that constitute the M1 and M2 money supply.
Verified Answer
ZK
Zybrea KnightJul 07, 2024
Final Answer :
C
Explanation :
M2 money supply includes all of M1 (currency, demand deposits, other checkable deposits, and traveler's checks) plus savings deposits, small time deposits, and money market mutual funds. Adding these values from the table: 150 (currency) + 300 (demand deposits) + 50 (other checkable deposits) + 5 (traveler's checks) + 65 (savings deposits) + 80 (small time deposits) + 200 (money market mutual funds) + 30 (miscellaneous categories of M2) = 880 billion dollars.
Learning Objectives
- Determine the elements that constitute the M1 and M2 money supply.