Final answer:
Demand deposits are included in the M1 money supply. M1 has recently been updated to include savings deposits, while large-denomination certificates of deposit, and money market account deposits are part of M2.
Step-by-step explanation:
The M1 money supply is a category of the money supply that includes all physical money like coins and currency, as well as demand deposits, which are the amounts held in checking accounts. This category is known for being very liquid. An important aspect to note is that the definition of M1 has changed over time, with savings deposits being reclassified from M2 to M1.
Given this change, out of the options provided, demand deposits are included in M1. Items such as large-denomination certificates of deposit, deposits in money market accounts, and savings deposits are classified under the broader category known as M2. The M2 money supply includes everything in M1 but also adds time deposits, certificates of deposits, and money market funds.
Therefore, the correct answer to the question is demand deposits.