Safarl File Edit View History Bookmarks Window Help INQUIZITIVE Chapter 15: Mone

Question

Safarl File Edit View History Bookmarks Window Help INQUIZITIVE Chapter 15: Money and the Federal Reserve C Page(s) 454-455 153. How is the money supply measured Place the U.S. money supply measures in order, smallest to largest. Currency Checkable deposits M1 Savings deposits M2 Good workl As of 2014, M2 totaled just over $11 trillion in the United States. Since the 1970s and the arrival of ATMs, ease of withdrawal from savings accounts has made the distinction between checking and savings less important. Now, M2 is a much better measure of the money supply than M1. Next Question Close Feedback

Explanation / Answer

The total amount of money available in the US is in the form currency held by public, checkable deposits held by the people at banks, the total amount accruing in the form of traveler’s checks that constitute M1. In addition to M1, the funds available in the money market, time deposits and savings deposits, all provide a measure of M2.

The smallest component is checkable deposits. Then it is the currency. Thereafter comes the M1 measure. Adding saving deposits to M1 will make M2.

From smallest to largest we have

Checkable deposits < Currency < M1 < saving account < M2.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.