Which of the following would not be included in the M₁ definition of money?
A) Coins
B) Paper currency
C) Small-denomination CDs
D) Travelers checks
E) Demand deposits

Question

Quizplus · Accepted Answer

Small-denomination CDs are not included in the M₁ definition of money. M₁ includes only the most liquid forms of money that can be easily used for transactions. Small-denomination CDs, with a fixed term and penalties for early withdrawal, are less liquid than other forms of money like demand deposits or cash.

Which of the Following Would Not Be Included in the M₁