WendyEller-Assignment-Unit 8

# WendyEller-Assignment-Unit 8 - Wendy Eller BU 204-02AU...

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Wendy Eller BU 204-02AU December 06, 2009 Assignment-Unit 8 Chapter 13 Problem 3 The table below shows the components of M1 and M2 in billions of dollars for the month of December in the years 1995 to 2004 as published in the 2005 Economic Report of the President. Complete the table by calculating M1, M2, currency in circulation as a percentage of M1, and currency in circulation as a percentage of M2. What trends or patterns about M1, M2, currency in circulation as a percentage of M1, and currency in circulation as a percentage of M2 do you see? What might account for these trends?

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See Next Page for Completed Table and answers. Answers: Year Currency In Circulation Traveler’ s Checks Checkable Deposits Money Market Funds Time Deposits < \$100,000 Savings Deposits M1 M2 Currency in Circulation as a percentage M1 Curren cy in Circula tion as a percent age M2 1995 \$372.1 \$9.1 \$745.9 \$448.8 \$931.4 \$1,134.0 \$1,127.1 \$3,64 1.3 33.0% 10.2% 1996 394.1 8.8 676.5 517.4 946.8 1.273.1 1,079.4 3,816. 7 36.5% 10.3% 1997 424.6 8.5 639.5 592.2 967.9 1,399.1 1,072.6 4,031. 8
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## This note was uploaded on 12/08/2009 for the course BU 204-02 taught by Professor Burge during the Fall '09 term at Kaplan University.

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WendyEller-Assignment-Unit 8 - Wendy Eller BU 204-02AU...

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