Currency held outside the banking system is included
A) in both M1 and M2.
B) in neither M1 nor M2.
C) in M2 but not M1.
D) in M1 but not M2.

Question

Quizplus · Accepted Answer

Currency held outside the banking system is included in both M1 and M2. M1 includes physical currency and coin, demand deposits, traveler's checks, and other checkable deposits. M2 includes all of M1 plus savings deposits, small-denomination time deposits, and retail money market mutual fund shares.

Currency Held Outside the Banking System Is Included