Given the following information, what are the values of M1 and M2? Small time deposits
$1,300 billion
Demand deposits and other checkable deposits
$600 billion
Savings deposits
$1,500 billion
Money market mutual funds
$1,200 billion
Traveler's checks
$50 billion
Large time deposits
$1,200 billion
Currency
$200 billion
Miscellaneous categories in M2
$50 billion
A)M1 = $800 billion, M2 = $4,950 billion.
B)M1 = $250 billion, M2 = $6,050 billion.
C)M1 = $850 billion, M2 = $4, 900 billion.
D)M1 = $850 billion, M2 = $6,100 billion.

Question

Quizplus · Accepted Answer

M1 includes currency, demand deposits, and other checkable deposits, and travelers' checks, which add up to $850 billion ($200 billion + $600 billion + $0 + $50 billion). M2 includes M1 plus savings deposits, small time deposits, and money market mutual funds, which add up to $4,900 billion ($850 billion + $1,300 billion + $1,500 billion + $1,200 billion + $0 + $50 billion). Therefore, the correct choice is C, as it provides the values for M1 and M2 that add up to the numbers given in the question.

Given the Following Information, What Are the Values of M1