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Checkable deposits are included in the M1, but not the M2, definition of the money supply. true or false

User JAdel
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Final answer:

True . Checkable deposits are included in the M1 definition of the money supply, but not in the M2 definition.

Step-by-step explanation:

The statement is true - checkable deposits are included in the M1 definition of the money supply, but not in the M2 definition.

M1 money supply includes coins, currency in circulation, and checkable deposits. Checkable deposits are the amounts held in checking accounts, which are considered as part of the M1 definition of money because they can be readily converted into currency or used as a medium of exchange.

On the other hand, M2 is a broader definition of the money supply that includes M1 plus other types of deposits such as savings deposits, money market funds, certificates of deposit, and other time deposits. Checkable deposits are not part of the M2 definition.

User Matus
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