1 Calculate M1 and M2 using details from the table given below Value (in millions) Currency $75 Checkable deposits 35 Traveler's checks 10 Savings deposits 110 Small denomination time deposits 75 Money market mutual fund shares 50 2 With a reserve ratio of 1 5, (a) what is the money multiplier (b) If the fed were to increase the money supply by $50 billion, what is the potential amount of money that can be created by the baking system 3 explain how banks can create money

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Question: 1.Calculate M1 and M2 using details from the table given below. Value (in millions) Currency $75 Checkable deposits 35 Traveler's checks 10 Savings deposits 110

1.Calculate M1 and M2 using details from the table given below.

	Value (in millions)
Currency	$75
Checkable deposits	35
Traveler's checks	10
Savings deposits	110
Small-denomination time deposits	75
Money market mutual fund shares	50

2. With a reserve ratio of 1/5, (a) what is the money multiplier? (b) If the fed were to increase the money supply by $50 billion, what is the potential amount of money that can be created by the baking system?

3. explain how banks can create money.

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