Our money supply,narrowly defined,consists of
A) currency, checking accounts, savings accounts, and money market mutual funds.
B) money created by the commercial banks.
C) coins, currency, demand deposits, and other checkable deposits.
D) cash, checks, and near money.
E) coins, paper money, all checkable deposits, and gold.

Question

Quizplus · Accepted Answer

The definition of narrow money supply includes only those assets that are readily convertible to cash, such as demand deposits, checking accounts, and coins and currency in circulation. These are all included in choice C. Choice A includes money market mutual funds, which are not always as easily liquidated as the other assets and therefore not always included in narrow money supply. Choice B refers to money created through loans made by banks, which is not a form of money supply but rather a result of money supply growth. Choice D includes near money, which is not included in narrow money supply. Choice E includes gold, which is not actively used as a medium of exchange in the modern economy and therefore not included in money supply.

Our Money Supply,narrowly Defined,consists of