Based on a Survey of Consumer Payment Choice, researchers from the Federal Reserve Bank of Boston estimated that the average consumer, 18 years of age and older, held about $340 in currency. However, as noted in the chapter, there is actually about $4,000 of currency for every person in the United States.
a. How can the amount of U.S. currency in circulation be so much higher than the amount held by the U.S. population?
b. What does the difference in part (a) imply about the measures of the money supply of the United States?