Identify a True Statement About Types of Money Supply

question 19

Multiple Choice

Identify a true statement about types of money supply.

• A)The M1 money supply includes market accounts and certificates of deposit.
• B)The M1 money supply includes all currency plus checking accounts and traveler's checks.
• C)The M2 money supply excludes all of M1 supply except certificates of deposit, which last typically less than one year.
• D)The M2 money supply excludes paper bills and metal coins.

---

Definitions:

Maturity Value

The sum payable to the holder of a financial instrument at the end of its term, encompassing the principal amount plus any accrued interest.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal amount.

Discount Period

The discount period is the timeframe during which a seller offers a buyer a reduction in the amount owed if payment is made within a specified time.

Discounted Note

A debt instrument sold for less than its face value that will pay the face value at maturity, effectively representing a loan made by the buyer to the issuer.