Which one of the following is included in the M1 money supply?
(a) Notes in circulation and demand deposits
(b) Currency in circulation and demand deposits
(c) Demand deposits, savings accounts, and time deposits
(d) Currency, demand deposits, and savings accounts

Question

Which one of the following is included in the M1 money supply?
(a) Notes in circulation and demand deposits
(b) Currency in circulation and demand deposits
(c) Demand deposits, savings accounts, and time deposits
(d) Currency, demand deposits, and savings accounts

ONLiNE UPSC · Accepted Answer

M1, a narrow measure of the money supply, includes currency in circulation (physical cash) and demand deposits (checking accounts). M1 does not include financial assets, such as bonds. The M1 money supply was a much more constrictive measurement of the money supply compared to the M2 or M3 calculation.

Money Supply

Components of M1 Money Supply

Website Link

Test Your Knowledge

Student Resources


E Question 1	⏱ 0
Which one of the following is included in the M1 money supply? (a) Notes in circulation and demand deposits (b) Currency in circulation and demand deposits (c) Demand deposits, savings accounts, and time deposits (d) Currency, demand deposits, and savings accounts