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Homework answers / question archive / Use the following information to answer questions 1 and 2: Consider the following statistics for the banking sector in Canada displayed in the table below (all numbers in billions of domestic currency)
Use the following information to answer questions 1 and 2:
Consider the following statistics for the banking sector in Canada displayed in the table below (all numbers in billions of domestic currency). Category
Amount (in billions of domestic currency)
Coins and Currency in Circulation 1100
Checkable Deposits 1
Traveler's Checks 1500
Savings Accounts 8200
Money Market Mutual Funds 1
Time Deposits 800
1) Using the data above, calculate M1 for Canada.
2) Using the data above, calculate M2 for Canada.
1) Computation of the M1 for Canada:-
M1 = Currency in circulation + Checkable deposits + Travelers check
= 1,100 + 1 + 1,500
= $2,601 billion
?2) Computation of the M2 for Canada:-
M2 = M1 + Saving deposits + Money market mutual funds + Time deposits
= 2,601 + 8,200 + 1 + 800
= $11,602 billion
