The Fed classifies different types of money depending on its:
A) liquidity.
B) resale value.
C) commodity back.
D) intrinsic value.

Question

Quizplus · Accepted Answer

The Fed classifies different types of money based on its liquidity, which refers to the ease with which it can be converted to cash. This includes M1 (currency, demand deposits, and other checkable deposits) and M2 (M1 plus savings deposits, money market securities, and other time deposits). Money is not classified based on its resale value, commodity backing, or intrinsic value.

The Fed Classifies Different Types of Money Depending on Its