ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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M1
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M1 and parts of M2
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all the money available in the economy
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all the money available in the economy plus money that the country could borrow
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Detailed explanation-1: -The money supply includes all cash in circulation and all bank deposits that the account holder can easily convert to cash. Governments issue paper currency and coins through their central banks or treasuries, or a combination of both.
Detailed explanation-2: -What Is the Money Supply? The U.S. money supply comprises currency-dollar bills and coins issued by the Federal Reserve System and the U.S. Treasury-and various kinds of deposits held by the public at commercial banks and other depository institutions such as thrifts and credit unions.
Detailed explanation-3: -The money supply is the total amount of money(currency+deposit money) present in an economy at a particular point in time. The standard measures to define money usually include currency in circulation and demand deposits. The record of the total money supply is kept by the Central Bank of the country.
Detailed explanation-4: -Both the currency in circulation and the deposits with banks are key components of the money supply.
Detailed explanation-5: -Government backs the money supply. In the United States, the money supply is backed up by the government, which guarantees to keep the value of the money supply relatively stable.