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M1 Unit 1 Essay

Decent Essays

1. Determine whether each of the following is counted in the M1 measure of the money supply:

i. The coins in your piggy bank
It is counted since it is considered as a currency. ii. The funds in your checking account at First National Bank. It is included since the value of a checking account is part of M1. iii. The funds in your savings account at Second National Bank.
This is not included since it is part of M2. iv. The traveler’s check you have left over from your trip to Germany. It is part of M1.
v. The available balance on your Citico Gold MasterCard
This is not part of M1but M2.
2. . Refer to the simplified balance sheet for a bank and answer the following questions.
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