Why Are Checking Account Balances Included in the M1 Definition

question 130

Multiple Choice

Why are checking account balances included in the M1 definition of the money supply?

• A)They are a traditional form of money that pre-dates paper money.
• B)They are used to make so many payments.
• C)They are backed by gold and silver.
• D)They pay interest.

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Definitions:

Operating Expenses

Operating expenses are the costs associated with the day-to-day operations of a business, excluding the cost of goods sold, such as rent, utilities, and payroll.

High-Low Method

A technique used in managerial accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.

Variable Lubrication Cost

pertains to lubrication expenses that vary with the level of machinery operation or production volume.

Machine Hours

A measure of the total time that production equipment operates within a specific period.