The cash you have in your wallet would be counted in which measure of money?
A) The monetary base
B) M1
C) M2
D) The monetary base, M1, and M2

Question

Quizplus · Accepted Answer

The cash in your wallet is considered part of the monetary base (physical money), M1 (which includes physical currency and demand deposits), and M2 (which includes all of M1 plus savings accounts and small time deposits). All these measures of money include physical currency, so cash in your wallet counts towards each of them.

The Cash You Have in Your Wallet Would Be Counted