Question

What are considered qualifying deposits for Chase Premier Checking (5)?

Answer 1

M1 includes traveler's checks and demand deposits, while M2 includes savings deposits and small-time deposits.

Step-by-step explanation:

M1 and M2 are monetary aggregates that measure the money supply in an economy. M1 includes currency, traveler's checks, demand deposits, and other checking accounts. M2 includes all the components of M1 plus savings deposits and small-time deposits. Now let's categorize the items from the list:

1. Your $5,000 line of credit on your Bank of America card is neither M1 nor M2 because it is a credit line, not an actual deposit.
2. $50 dollars' worth of traveler's checks you have not used yet is considered part of M1 since traveler's checks are included in the M1 definition.
3. $1 in quarters in your pocket is not part of M1 or M2 because currency does not fall into either category.
4. $1200 in your checking account is considered part of M1 since demand deposits are included in the M1 definition.
5. $2000 you have in a money market account falls into M2 category since money market accounts are part of the M2 definition.