91Ó°ÊÓ

Here, as you recognize that the money is that any mediumthat's universally accepted in an economy by both the sellers and creditors.
In addition, $M1$ is defined because the cash in hand, measured because the total value of currency plus transactions deposits plus traveler's checks not issued by banks.

$\mathrm{M}1=\text{Currency}+\text{Transaction Deposits}+\text{Traveller's Checks}$

$M2$ is that the liquidity approach to defining and measuring the U.S. funds as $M1$ plus several other assets.

$\mathrm{M}2=\text{Saving deposits}+\left(\begin{array}{c}\text{Small}−\text{denomination}\\ \text{time deposits}\end{array}\right)+\left(\begin{array}{c}\text{Money market}\\ \text{mutual funds}\end{array}\right)$

a) a. Here, as providing the statement may be a $1,000$ balance in an exceedingly transactions deposit at a mutual saving bank.

The given statement is counted in both $M1$and $M2$. this can be because; it's a transaction deposit yet as a deposit at a mutual savings bank. this can be showed as within the below:

$\text{M1 = Currency}+\text{Transaction Deposits}+\text{Traveller's Checks}$

$\mathrm{M}2=\text{Saving deposits}+\left(\begin{array}{c}\text{Small}−\text{denomination}\\ \text{time deposits}\end{array}\right)+\left(\begin{array}{c}\text{Money market}\\ \text{mutual funds}\end{array}\right)$

(b) In the above formulas, this is often cleared that the given statement is counted in both $M1$and $M2$.

As on condition that the statement may be a $\$100,000$ CD during a the big apple bank.
It is neither, because it's not included in $M1$. additionally, this can be not $M2$, because to be treated as $M2$ time deposits must be but $\$100,000$.

c. Here, given the statement is counted in $M2$, because the worth of your time deposits is a smaller amount than $\$10,000$. The below formula will clear to this:

$\mathrm{M}2=\text{Saving deposits}+\left(\begin{array}{c}\text{Small}−\text{denomination}\\ \text{time deposits}\end{array}\right)+\left(\begin{array}{c}\text{Money market}\\ \text{mutual funds}\end{array}\right)$

d. Given a $\$50$travelers check is counted in $M1$, because it's atraveler'sletter of credit issued aside from banks. The below formula will clear to this:

$\text{M1}=\text{Currency}+\text{Transaction Deposits}+\text{Traveller's Checks}$

e. Now, give statement as a $\$50,000$saving deposit is counted in $M2$. Because, total savings deposits form largest component of $M2$ cash in hand as shown below:

$\text{M2 = Saving deposits}+\left(\begin{array}{c}\text{Small}−\text{denomination}\\ \text{time deposits}\end{array}\right)+\left(\begin{array}{c}\text{Money market}\\ \text{mutual funds}\end{array}\right)$