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I am stuck on these and not having easy time in homework. Please help. In December 2020, individuals and businesses held $250 billion in currency
I am stuck on these and not having easy time in homework. Please help.
In December 2020, individuals and businesses held
- $250 billion in currency and no traveler's checks
- $1,400 billion in checkable deposits
- $4,100 billion in savings deposits
- $800 billion in time deposits
- $400 billion in money market funds and other deposits
In December 2020, banks held
- $850 billion in currency
- $500 billion in reserves at the central bank
- $1,000 billion in loans to households and businesses
Using the information mentioned above, answer the following questions.
- Calculate the M1 and M2 measures of money.
M1=2,500 billion
M2=7,800 billion
- Calculate the monetary base.
Monetary Base: 1,350 billion
- What are the currency drain ratio and the banks' reserve ratio?
- What are the M1 and M2 money multipliers?
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