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

Question

Quizplus · Accepted Answer

Checking account balances are included in the M1 definition of the money supply because they are widely used to make payments. They can be easily transferred between accounts and used to make purchases through debit cards, checks, and online payment systems.

Why Are Checking Account Balances Included in the M1 Definition