Suppose you are given the following data: Currency in circulation &n
Suppose you are given the following data:
Currency in circulation $1,000
Net Demand deposits at chartered banks $13,000
Nonpersonal notice and personal savings deposits at chartered banks $12,000
Deposits at other financial institutions $6,000
Nonpersonal term and foreign currency deposits $9,000
What are M1, M2, M2+, and M3? Assume adjustments to the various aggregates are zero.
Homework Answers
M1 = currency in circulation + demand deposits
M1 = 1000 + 13000 = 14000
M2 = M1 + Nonpersonal notice and personal savings deposits at chartered bank
M2 = 14000 + 12000 = 26000
M2+ = M2 +deposits at other financial institutions
M2+ = 26000 + 6000 = 32000
M3 = M2+ +Non personal term and foreign currency deposits
M3 = 32000 + 9000 = 41000
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