Currency and chequable deposits are money according to the definition of money
A)that is known as M1+.
B)that uses the liquidity approach.
C)that includes an important near money.
D)that is known as M2+.

Question

Quizplus · Accepted Answer

M1+ includes currency and chequable deposits which are both components of money according to the definition of money.

Option B is incorrect because this approach is not specifically related to the definition of money, but rather focuses on the ease with which an asset can be converted to cash.

Option C is incorrect because "near money" refers to assets that are not completely liquid but are still easily convertible to cash. It is not a component of money according to the definition.

Option D is incorrect because M2+ typically includes non-chequable savings deposits and retail money market mutual fund shares, which are not part of the definition of money.

Currency and Chequable Deposits Are Money According to the Definition