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Blizzard [7]
3 years ago
5

The narrowest definition of the money supply (M1) includes:

Business
1 answer:
fenix001 [56]3 years ago
5 0

Answer:

c. cash, checking account balances, and travelers' checks.

Explanation:

Money Supply is the concept that means the amount of the liquid financial products and total currency in the market or economy. It is regulated the macro-economically by the monetary policy. So, there are types of measures of money supply or stock:

-M0: narrowly, it means the hard currency in circulation

-MB: it equals M0+ the hard currency which are not technically in circulation and in bank reserves.

-M1: it is the most common one and equals M0 plus checking accounts plus travelers’ checks and other checkable deposits.

-M2: covers M1 and saving accounts and CDs.

-M3: it surrounds the larger deposits.

-MZM: finally, this indicates the money market deposits.

That’s why we could notice that M1 narrowly means the cash, checking account and travelers’ checks.

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Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of soda, one bag of ch
Virty [35]

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