The table below shows hypothetical values, in billions of dollars, of different forms of money.Use the table to calculate the M1 and M2 money supplies for each year, as well as the growth rates of the M1 and M2 money supplies from the previousWhy are the growth rates of M1 and M2 so different? 2019202020212022ACurrency880895900906BMoney market mutual fund shares680685683692CSaving account deposits5500578059686105DMoney market deposits accounts1214124512741329EDemand and checkable deposits1000972980993FSmall denomination time deposits84087111331576GTraveler’s check5543H3-month treasury bills1986237424362502

The objective of the question is to calculate the M1 and M2 money supplies for each year and their…

Answered: The table below shows hypothetical…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter13: Money And The Banking System

Section: Chapter Questions

Problem 18CQ

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Question

The table below shows hypothetical values, in billions of dollars, of different forms of money.
1. Use the table to calculate the M1 and M2 money supplies for each year, as well as the growth rates of the M1 and M2 money supplies from the previous
2. Why are the growth rates of M1 and M2 so different?

	2019	2020	2021	2022
A	Currency	880	895	900	906
B	Money market mutual fund shares	680	685	683	692
C	Saving account deposits	5500	5780	5968	6105
D	Money market deposits accounts	1214	1245	1274	1329
E	Demand and checkable deposits	1000	972	980	993
F	Small denomination time deposits	840	871	1133	1576
G	Traveler’s check	5	5	4	3
H	3-month treasury bills	1986	2374	2436	2502

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

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