Question

M1 equals currency plus demand deposits plus a. nothing else. b. other checkable deposits. c. traveler's checks plus other checkable deposits. d. traveler's checks plus other checkable deposits plus savings deposits.

Answer 1

The answer in this case,is traveler's checks plus other checkable deposits or option c. mentioned in the answer options or list.

Step-by-step explanation:

• In Monetary Economics,M1 money supply constitutes the liquid form of the overall money supply in the economy as it primarily contains the currency money and coins which can be readily transformed into cash.
• M1 money supply is calculated by aggregating the currency and coins, demand deposits,traveler's checks and other checkable deposits.It also consists some of the withdrawal account transactions.
• M1 money supply does not include any financial assets or commodities such as stocks,shares or bonds and any kind of savings deposit.
• It is often considered as the fundamental money supply in the economy which is mostly used as medium of exchange.