The narrowest definition of the money supply (M 1 ) includes

M 1 , also known as M1, includes only the most liquid forms of money such as physical cash, checking account balances, and travelers' checks. It does not include savings account balances or money market accounts, which are considered less liquid. Therefore, the correct choice is C which includes all the items in M1.

The narrowest definition of the money supply (M 1 ) includes

M 1 , also known as M1, includes only the most liquid forms of money such as physical cash, checking account balances, and travelers' checks. It does not include savings account balances or money market accounts, which are considered less liquid. Therefore, the correct choice is C which includes all the items in M1.

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The Narrowest Definition of the Money Supply (M₁) Includes

Question 86

Multiple Choice

The narrowest definition of the money supply (M₁) includes

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

Correct Answer: