Checkable deposit account balances are
A) counted in the calculation of the money supply.
B) part of M2 but not part of M1.
C) considered credit, but not money.
D) only a small component of the money supply.

Question

Quizplus · Accepted Answer

Checkable deposit account balances, also known as demand deposits, are included in the calculation of the money supply because they can be easily converted into cash or used as a medium of exchange. Therefore, they are considered part of both M1 and M2 money supplies.

Checkable Deposit Account Balances Are