1.Calculate M1 and M2 using details from the table given below.

	Value (in millions)
Currency	$75
Checkable deposits	35
Traveler's checks	10
Savings deposits	110
Small-denomination time deposits	75
Money market mutual fund shares	50

2. With a reserve ratio of 1/5, (a) what is the money multiplier? (b) If the fed were to increase the money supply by $50 billion, what is the potential amount of money that can be created by the baking system?

3. explain how banks can create money.