E.6.2


 * E.6.2**: **Identify the composition of the money supply of the United States.**

Money Supply: amount of money in circulation. The size of the money supply influences trade, interest rates, and consumer activity.

Money supply’s three sections: M1: Simply—all currency in circulation, value of all traveler’s checks, checking deposits and all checking type accounts

M2: Broader & complex—Includes money market accounts, mutual funds, and other savings deposits that allow people easy access to their funds, as well as the money counted in M1.

M3: (Large umbrella) All money from M2 & all deposits over $100,000. M2 & all deposits over $100,000. When economists speak of L as a measure of the money supply they have added savings bonds, short-term Treasury securities and other types of near moneys to the total count. (O’Connor 1988)

Bibliography: Unknown, (2007, April 24). Unit of Account. Retrieved May 9, 2007, from Wikipedia Web site: http://en.wikipedia.org/wiki/Unit_of_account

Miller, R (1991). //Economics Today and Tomorrow, 3rd ed.//. Mission Hills, CA: Glencoe/McGraw-Hill.

O'Connor, D (1988). //Economics: Free Enterprise in Action//. Orlando, FL: Harcourt Brace Jovanovich.