Which one of the following is the largest component of the money supply (M1) in the United States?
A) demand and other checking deposits
B) gold certificates
C) credit cards and traveler's checks
D) Federal Reserve notes

Question

Quizplus · Accepted Answer

Demand and other checking deposits make up the largest component of M1, which includes all currency in circulation, traveler's checks, demand deposits, and other checkable deposits. Federal Reserve notes (D) are physical paper currency issued by the Federal Reserve and make up a significant portion of M1, but demand and checking deposits have a larger overall value. Gold certificates (B) are no longer in circulation, and credit cards and traveler's checks (C) are not considered part of M1 but rather are included in M2 or M3.

Which One of the Following Is the Largest Component of the Money