Final answer:
The money supply definitions in the United States, as regulated by the Federal Reserve Bank, are primarily based on the liquidity of money, distinguishing between M1 (very liquid assets) and M2 (which includes M1 plus less liquid assets). The correct answer is option: b) Liquidity of money.
Step-by-step explanation:
In the United States, the money supply definitions are based on the liquidity of money. The Federal Reserve Bank, being the central bank of the U.S., regulates banks and oversees the monetary policy, including the definition and measurement of the nation's money supply. M1 money supply includes highly liquid forms of money, such as cash, checkable (demand) deposits, and traveler's checks.
On the other hand, M2 money supply encompasses M1 plus other types of money that are less liquid, which includes savings and time deposits, certificates of deposits, and money market funds.