deposit cash in your checkable deposit at your bank, the quantity of M1 immediat

Question

deposit cash in your checkable deposit at your bank, the quantity of M1 immediately $1,660 in If you O increases by $2,000. O does not change in size. decreases by $1,000 increases by $1,000 QUESTION 14 In December 2009, currency was $400 billion, traveler's checks were $5 billion; checkable deposits owned by individuals and businesses were s600 billion, saving deposits were $2,000 billion, time deposits were $1,500 bilion: and money market funds were $1,200 bilion. What was the M1 in December 2009? M1 $1,005 billion M1-$3,005 billion M1-$3500 billion M1-$405 billion QUESTION 15 4 pe In December 2009, curency outside of banks was $400 billion, traveler's checks were $5 billion; checkable deposits owned by individuals and businesses were $600 billion, saving deposits were $2,000 billion, time deponits were $1,500 billion; and money market funds were $1,200 bilion What was the M2 in December 2009 M2-$5,300 billion M2 $1,005 bilion M2-S3505 billion M2 $5,705 billion QUESTION 16 4 point Which of the following is an asset for a bank? shareho ders' equity deposits of its customers short-term borrowing

Explanation / Answer

M1 = Currency + Traveller's Check + Checkable deposits

Question 13

If $ 1,000 is deposited in checkable deposits, then Currency reduces to the extent of $ 1,000 and Checkable deposit is increasec by $ 1,000.
Hence the M1 does not change in size.

Question 14

M1 = Currency + Traveller's Check + Checkable deposits
= $ (400 + 5 + 600) billion
= $ 1,005 billion

Question 15

M2 = M1 + Savings deposit + Time Deposit + Money market funds
= $ (1005 + 2000 + 1500 + 1200) billion
= $ 5,705 billion

Question 16

Deposits of its customer is an asset for the bank.

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