The measure of the money stock called M1 includes
A)wealth held by people in their checking accounts.
B)wealth held by people in their savings accounts.
C)wealth held by people in money market mutual funds.
D)everything that is included in M2 plus some additional items.

Question

Quizplus · Accepted Answer

M1 includes only the most liquid forms of money, such as currency in circulation, traveler's checks, demand deposits (checking accounts), and other deposits against which checks can be written. Wealth held in savings accounts and money market mutual funds are not included in M1. D is also incorrect because M1 is a subset of M2, not the other way around.

The Measure of the Money Stock Called M1 Includes