Identify a true statement about types of money supply.
A)The M1 money supply includes market accounts and certificates of deposit.
B)The M1 money supply includes all currency plus checking accounts and traveler's checks.
C)The M2 money supply excludes all of M1 supply except certificates of deposit, which last typically less than one year.
D)The M2 money supply excludes paper bills and metal coins.

Question

Quizplus · Accepted Answer

The M1 money supply is commonly defined as the sum of currency held by the public and demand deposits (which are checking accounts and other deposits that can be withdrawn on demand) held by banks and thrift institutions. Traveler's checks are also considered a part of M1. Market accounts and certificates of deposit are not included in M1, but are considered a part of M2.

Identify a True Statement About Types of Money Supply