M1 includes
A)Currency and coins in circulation,traveler's checks,demand deposits at commercial banks,and other checkable deposits
B)Currency and coins in circulation,all demand deposits,and all time deposits
C)All demand deposits and all time deposits
D)Just currency and coins in circulation
E)None of the above

Question

Quizplus · Accepted Answer

M1 includes currency and coins in circulation, traveler's checks, demand deposits at commercial banks, and other checkable deposits. It is the most narrow definition of the money supply and represents the most liquid forms of money that can be used for transactions. Option B and C are incorrect as they include time deposits, which are less liquid and cannot be readily used for transactions. Option D is incorrect as it only includes currency and coins, and not other forms of deposits. Option E is incorrect as there is a correct answer available.

M1 Includes