Question
Rose has the following list of assets: $40 in coins $120 in currency $2200 in a money market deposit account $1500 in credit card balances
Rose has the following list of assets:
$40 in coins $120 in currency $2200 in a money market deposit account $1500 in credit card balances $500 in a checking account $450 in T-bills $1700 in a U.S. government bond $400 in commercial paper
1. Compute the total amount of Rose's assets included in M1.
2. Compute the total amount included in M2.
3. Suppose Rose sells her $450 in T-bills and deposits these funds into her money market deposit account. Compute the change in M1. Compute the change in M2.
4. Suppose Rose transfers $1000 from her money market deposit account into her checking account. Compute the change in M1. Compute the change in M2.
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