Lesson 53 pg. 151 - 153

Question 1

List the three main categories that economists normally break up our nation’s money supply into

Answer 1

> M1
M2
M3

Question 2

Describe M1

Answer 2

> most narrowly defined category that economists normally break up our nation’s money supply into
includes the value of all the balances in various types of transaction accounts, as well as traveler’s checks, and all coins and currency held outside of banks

Question 3

Describe M2

Answer 3

> next category of money
often called near-monies - assets that can be easily converted into M1 because they are highly liquid
consists of M1 plus noncheckable savings deposits, money market mutual funds and similar deposits, and time deposits (those with specific date of maturity) worth less than $100,000

Question 4

Describe M3

Answer 4

> also called near-monies - assets that can be easily converted into M1 because they are highly liquid
includes time deposits worth over $100,000, as well as the money counted in M2