4. The following information is available to you: travelers\' checks = $1 millio

Question

4. The following information is available to you: travelers' checks = $1
million; coin and paper currency = $30 million; repurchase agree¬
ments and Eurodollars = $15 million; demand deposits = $25 million;
retail money market mutual funds = $60 million; savings accounts at
depository institutions = $40 million; checkable deposits at depository
institutions = $35 million; large-denomination time deposits = $50
million; institutional money market mutual funds = $65 million; and
small-denomination time deposits = $45 million. Using Federal
Reserve definitions, determine the dollar sizes of the following:
a. Ml money supply
b. M2 money supply
c. M3 money supply

Explanation / Answer

M1 will include : travelers' checks = $1million; coin and paper currency = $30 million; repurchase agreements and Eurodollars = $15 million; demand deposits = $25 million; time deposits = $50 million checkable deposits at depository institutions = $35 million; Total = $156 million (ANSWER) M2 will include : travelers' checks = $1million; coin and paper currency = $30 million; repurchase agreements and Eurodollars = $15 million; demand deposits = $25 million; savings accounts at depository institutions = $40 million; checkable deposits at depository institutions = $35 million; denomination time deposits = $50 million; small-denomination time deposits = $45 million Total = $241 million (answer) M3 will include : travelers' checks = $1million; coin and paper currency = $30 million; repurchase agreements and Eurodollars = $15 million; demand deposits = $25 million; savings accounts at depository institutions = $40 million; checkable deposits at depository institutions = $35 million; institutional money market mutual funds = $65 million; denomination time deposits = $50 million; small-denomination time deposits = $45 million Total = $306 million (ANSWER)

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