Question

Currency =649
Savings and money market deposit accounts=3, 181
​Small-denomination time deposits=1,579
​Traveler's checks outside banks and thrifts=12
Noninstitution money market mutual funds=795
​Institution-only money market mutual funds=192
Transaction deposits= 933
Part 2
Calculate M1. ​$---billion.

Answer 1

b. Calculate M2. ​$---billion.

Answer 2

To calculate M1, we need to add up currency, traveler's checks outside banks and thrifts, and transaction deposits.

M1 = Currency + Traveler's checks outside banks and thrifts + Transaction deposits
M1 = 649 + 12 + 933
M1 = 1594 billion.

Therefore, M1 is $1594 billion.

Answer 3

To calculate M2, we need to add up M1, savings and money market deposit accounts, small-denomination time deposits, and noninstitution money market mutual funds.

M2 = M1 + Savings and money market deposit accounts + Small-denomination time deposits + Noninstitution money market mutual funds
M2 = 1594 + 3181 + 1579 + 795
M2 = 7149 billion.

Therefore, M2 is $7149 billion.