b) You have been given the following information monetary assets of a country in a specific budget year:
Cash in hands of the public = Kshs. 300b (where ‘b’ represents billion)
Demand Deposits (DD) = Kshs. 400b
Other Checkable Deposits = Kshs. 150b
Traveler’s checks = Kshs. 50b
Savings Type accounts = Kshs. 2000b
Money Market Mutual Funds (MMMF) = Kshs. 1000b
Small Time Deposits = Kshs. 500b
Large Time Deposits = Kshs. 450b
i) Calculate M1 for the economy. (2 Marks)
ii) Calculate M2 for the economy. (3 Marks)
iii) Calculate the money supply for the economy. (3 Marks)
iv) Which item is not included in the calculations of M1 and M2? (2 Marks)
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2018-10-16T11:28:48-0400
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