Currency held by the public plus balances in transactions accounts are the
A)Total reserves.
B)Money supply (M1).
C)Required reserves.
D)Money supply (M2).

Question

Quizplus · Accepted Answer

Currency held by the public plus balances in transactions accounts (such as checking accounts) make up the money supply known as M1. Total reserves and required reserves are related to the banking system and do not include currency held by the public. M2 is a broader measure of money supply that includes M1 plus some additional types of accounts, such as savings accounts and small time deposits.

Currency Held by the Public Plus Balances in Transactions Accounts