Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes. Example M1 M2 Larry has $25,000 in a money market account. Felix has a roll of quarters that he just withdrew from the bank to do laundry. Megan has $8,000 in a two-year certificate of deposit (CD).

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Business

Adrienne Clark

20 April, 08:16

Identify whether each of the following examples belongs in M1 or M2. If an example belongs in both, be sure to check both boxes. Example M1 M2 Larry has $25,000 in a money market account. Felix has a roll of quarters that he just withdrew from the bank to do laundry. Megan has $8,000 in a two-year certificate of deposit (CD).

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Kinsley Arellano · Answer 1

Answer

Given that:

The Boxes are M1 and M2

The Larry has $25,000 in a money in the market.

Megan has $8,000 in a 2 year certificate of deposit.

Felix has a roll of quaters.

M1 = Currency circulation + checks of traveller + balance of transaction account.

M2 = M1 + saving account which is small + funds of money market + deposits for small time + other deposits.

1st Example: M1 & M2 both. Because here money is circulating from bank to laundry. This is the condition of M1 and M2 also includes M1. Hence M1 and M2 both are correct for this example.

2nd Example: M2. Because here $25000 is a fund of money market which is the condition of M2.

3rd Example: M2. Because here $8000 is a certificate deposit for 2 years. All small time period deposits are the condition of M2.