As an aggregate measure of the money supply,M1 consists of cash held by the public,as well as money in a variety of checking accounts.

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In order to measure the money supply, economists focus on two aggregates known as M1 and M2. M1 consists of cash held by the public and money in a variety of checking accounts. M2 consists of money held in interest-paying accounts that may restrict the owner's right to withdraw funds on short notice.

As an Aggregate Measure of the Money Supply,M1 Consists of Cash