The Reason Why a Savings Account Is Not Considered a Component

question 40

True/False

The reason why a savings account is not considered a component of the M-1 money supply is that it bears interest.

---

Definitions:

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Rising Prices

This term indicates an economic situation where the general level of prices of goods and services in an economy increases over a period.

Net Income

The amount of money a company earns after all expenses and taxes have been subtracted from its total revenue.

Inventory Cost

The total cost incurred to procure, produce, and store inventory, including purchase price, production, and handling costs.