Checking account balances are included in
A) M1 only.
B) M2 only.
C) both M1 and M2.
D) neither M1 nor M2.

Question

Quizplus · Accepted Answer

Checking account balances are included in both M1 and M2. M1 includes narrow money that can be used directly as a medium of exchange, while M2 includes broader money that includes M1 as well as savings deposits and money market funds. Checking account balances are included in both of these definitions of money supply.

Checking Account Balances Are Included in