Determine the total amounts of M1 and M2 based on the follow

Determine the total amounts of M1 and M2 based on the following data from July 2010:

Currency held by individuals and businesses was $921 billion.

Traveler\'s checks were $7 billion.

Checkable deposits owned by individuals and businesses were $813 billion.

Savings deposits were $5,420 billion.

Small time deposits were $1,700 billion.

Money market funds and other deposits were $1,003 billion.

Solution

M1 = Currency held by individuals and businesses + Checkable deposits owned by individuals and businesses

M1 = 921+813 = $1734 billion

M2 = Currency held by individuals and businesses +Traveler\'s checks+ Checkable deposits owned by individuals and businesses + Savings deposits+Small time deposits+ Money market funds and other deposits

921+7+813+5420+1700+1003

$9864 billion