M1 is a measure of
A) money and includes both savings deposits and currency.
B) liquidity and in which the most liquid asset is money.
C) money and includes both savings deposits and money market mutual funds.
D) money and includes both currency and checking deposits.

Question

Quizplus · Accepted Answer

M1 is a measure of money which includes the most liquid forms of money, and these are currency and checking deposits. Therefore, option D is the correct choice. Choices A and C are not correct since they include less liquid forms of money like savings deposits and money market mutual funds. Choice B describes the concept of liquidity but is not a correct definition of M1 measure.

M1 Is a Measure of