Question

1. Use the following information about the economy of Argentina in February 2020 to answer the...

1. Use the following information about the economy of Argentina in February 2020 to answer the below question

Deposits in checking accounts - $133 billion
Deposits in savings accounts - $210 billion
Deposits in other, illiquid accounts - $112 billion
Small time deposits - $9 billion
Currency - $116 billion
Bank reserves - $92 billion

What is the value of M1 in Argentina for February 2020?

2.

Use the following information about the economy of Argentina in February 2020 to answer the below question

Deposits in checking accounts - $133 billion
Deposits in savings accounts - $210 billion
Deposits in other, illiquid accounts - $112 billion
Small time deposits - $9 billion
Currency - $116 billion
Bank reserves - $92 billion

What is the value of M2 in Argentina for February 2020?

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Homework Answers

Answer #1

1. M1 = Currency + Deposits in checking accounts + Deposits in other, illiquid accounts

          = 116 + 133 + 112

          = $361 billion

2. M2 = M1 + Deposits in savings accounts + Small time deposits

          = 361 + 210 + 9

          = $580 billion

Note: Bank reserves is not directly part of the money supply.

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