The form of money consisting of currency held by the public and checkable deposits at depository institutions is called
A) M1.
B) M2.
C) M3.
D) MMDA.

Question

Quizplus · Accepted Answer

M1 is defined as the narrowest form of money supply, consisting of currency held by the public and checkable deposits at depository institutions. M2 includes M1 but also includes savings deposits, small time deposits, and retail money market mutual funds. M3 includes M2 but also includes large time deposits, institutional money market funds, and other large liquid assets. MMDA (Money Market Deposit Account) is a type of account at depository institutions that typically offers higher interest rates but has limitations on the number of withdrawals per month.

The Form of Money Consisting of Currency Held by the Public