Why are checking account balances included in the M₁ definition of the money supply? A)Checking account balances are a traditional form of money that predates paper money. B)Checking account balances are used to make so many payments. C)Checking account balances are backed by gold and silver. D)Checking account balances pay interest.

Question

Quizplus · Accepted Answer

Checking account balances are included in the money supply definition because they are used for making payments and easily transferable between accounts. Checking accounts are a form of demand deposits, which means they can be accessed quickly and easily, making them a key component of the money supply.

Why Are Checking Account Balances Included in the M1 Definition

Why Are Checking Account Balances Included in the M₁ Definition