Currency held outside the banking system is included
A) in neither M1 nor M2.
B) in M2 but not M1.
C) in M1 but not M2.
D) in both M1 and M2.

Question

Quizplus · Accepted Answer

Currency held outside the banking system is included in both M1 and M2. M1 includes currency, demand deposits, and travelers checks while M2 includes M1 plus savings deposits, small-denomination time deposits, and balances in retail money market mutual funds.

Currency Held Outside the Banking System Is Included