M1 includes the most liquid forms of money, namely physical currency (cash) and deposits at financial institutions that can be accessed on demand (checking account balances and travelers' checks). Saving account balances and money market accounts are considered part of M2, which includes less liquid forms of money.

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M1 Includes

Question 49

Multiple Choice

M1 includes:

A) cash and travelers' checks.
B) cash, checking account balances, and travelers' checks.
C) cash, travelers checks', and bank deposits
D) cash, checking account balances, and saving account balances.
E) cash, bank deposits, and money market accounts.

Correct Answer: