Final answer:
The correct option is A. Check.
A bill of exchange payable on demand when drawn on a bank is known as a check. It is a part of the M1 money supply, which includes all immediate forms of payment like currency and demand deposits.
Step-by-step explanation:
A bill of exchange drawn on a bank and payable on demand is a financial instrument that facilitates payment between parties. In the context of banking and finance, the correct answer to the question is A. Check. A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or to a specified person from the drawer's account.
Dealing with demand deposits, checks are considered a form of money within the M1 money supply, which includes all coins, currency, and checkable deposits that the federal banking system recognizes as immediate forms of payment. This connection to the M1 money supply underpins their status as negotiable instruments that can be used when people hold money for the purpose of buying things. Checks share similarities with debit cards in that both provide instructions to the user's bank to transfer money directly and immediately from the bank account to the seller or payee.