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Which source of money is most liquid, or available for consumers to use? A. Certificates of...

Which source of money is most liquid, or available for consumers to use?

A. Certificates of deposit

B. M1

C. M2

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Answer #1

Answer -  Which source of money is most liquid, or available for consumers to use?

B. M1

M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler’s checks. These are the amounts held in checking accounts. They are called demand deposits or checkable deposits because the banking institution must give the deposit holder his money “on demand” .M2 money supply is less liquid in nature and includes M1 plus savings and time deposits, certificates of deposits, and money market funds. certificates of deposit (CDs) or time deposits, which are accounts that the depositor has committed to leaving in the bank for a certain period of time, ranging from a few months to a few years, in exchange for a higher interest rate.

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