The money supply includes currency in circulation outside the banking system (notes and coins in the hands of the public) plus the deposits of commercial banks. This definition encompasses the most liquid forms of money accessible to the economy for transactions and savings.

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The Money Supply Is

Question 57

Multiple Choice

The money supply is:

A) currency in circulation outside the banking system, plus deposits of commercial banks.
B) currency in circulation inside the banking system, plus deposits of commercial banks.
C) currency in circulation.
D) currency in circulation plus commercial bank lending.

Correct Answer: