Checking accounts that pay interest are included in the
A) "demand deposits" part of M1.
B) "other checkable deposits" part of M1.
C) "savings deposits" part of M2.
D) "money market mutual funds deposits" part of M2.

Question

Quizplus · Accepted Answer

Checking accounts that pay interest are considered "other checkable deposits" and are included in the M1 measure of the money supply. Option A is incorrect because "demand deposits" refer to traditional checking accounts that do not earn interest. Option C is incorrect because "savings deposits" are part of M2, not M1. Option D is incorrect because "money market mutual funds deposits" are also included in M2, not M1, and this option does not refer specifically to checking accounts.

Checking Accounts That Pay Interest Are Included in the