ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following is NOT an example of money, as defined by M1?
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currency
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a credit card balance
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traveler’s checks
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a checking account
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Explanation:
Detailed explanation-1: -The following are NOT part of M1: currency in banks. currency and checkable deposits owned by the government. currency and checkable deposits owned by the Federal Reserve Banks.
Detailed explanation-2: -M1 includes currency i.e. banknotes and coins, plus overnight deposits.
Detailed explanation-3: -M1 includes all money that is highly liquid or can be converted into cash readily. It does not include any financial assets like bonds and savings accounts. Time deposits are included in M2 money.
Detailed explanation-4: -M1 includes coins, currency, and checkable deposits but not small time deposits.
There is 1 question to complete.