Money Supply and M1 Components Quiz

What does the money supply include in the United States economy?

• Only physical currency

• All the money available

• Only digital transactions

• Only foreign currency

What is M1 primarily composed of?

• Long-term investments

• Illiquid assets

• Assets with liquidity

• Real estate

Which of the following is a component of M1?

• Stocks and bonds

• Real estate

• Traveler’s checks

• Gold reserves

What are demand deposits?

• Money in savings accounts

• Money in checking accounts

• Money in retirement accounts

• Money in foreign banks

What does the money supply represent in the United States economy?

• All the money available in the United States economy

• Only the cash held by banks

• Only the money in circulation

• Only the money held by the government

What does M2 include in addition to the assets in M1?

• Only cash deposits

• Deposits in savings accounts and money market mutual funds

• Only government bonds

• Only corporate stocks

What is one of the primary functions of banks?

• Providing medical services

• Offering travel packages

• Storing money safely

• Selling electronics

What do banks issue that allows holders to buy goods and services based on a promise to pay?

• Debit cards

• Credit cards

• Gift cards

• Membership cards

What is a key service provided by banks to consumers?

• Organizing events

• Offering a safe place to store money

• Selling groceries

• Providing entertainment

What is the basis for using a credit card issued by a bank?

• Immediate payment

• Holder's promise to pay

• No payment required

• Payment in cash only